1, see "Non-standard"
If there are too many notes in the financial statements of listed companies, their management may hide ulterior secrets (which can be judged by Occam's razor thinking in philosophy).
If a listed company is issued with "non-standard" audit opinions (except "standard unqualified opinions", all other audit opinions indicate that the audit institution has objections or doubts about the financial statements, which is referred to as "non-standard opinions" for short), then investors should pay careful attention.
Step 2 look at income
A healthy and stable growth enterprise, its income should mainly come from "main business income", and the main business income has grown steadily for three consecutive years. If a large part of the income comes from temporary one-off income, for example, some companies always increase their income by selling assets or through subordinate enterprises, then the company's ability to continue to operate is questionable.
In addition, there is a common situation that relies on interest income to support the profitability of the whole company. Of course, interest is also an important part of the company's operating income and profit, but it can't reflect the growth of a company well.
Step 3 look at cash flow
In a sense, cash flow is more important and real than income and profit. It is easy to manipulate the book income and profit artificially, but the real cash flow greatly increases the difficulty of distorting the performance and determines the life and death of the enterprise. From this point of view, "cash is king" is no exaggeration.
Investors should pay attention to the cash flow statement and income statement. If the company's final cash flow is negative, then the company is often in a state of cash shortage.
Step 4 look at profits
This indicator directly reflects the profitability of the company. For this indicator, we need to analyze it in depth and treat it dialectically. We need to pay attention to whether the main source of company profits comes from "main business profits"; Excessive proportion of temporary one-off profit sources (such as investment income, net non-operating income and expenditure and financial subsidies) will only increase the instability of enterprises and increase the risks of enterprises.
Extended data:
Problems needing attention in enterprise financial statements
Only by reducing the sales cost can the sales profit be raised to a higher level. Although the cost of sales itself cannot tell us whether the company has a lasting competitive advantage, it can tell us the size of the company's gross profit. By analyzing the profit statement of an enterprise, we can see whether the enterprise can create profits and whether it has lasting competitiveness.
Whether an enterprise can make a profit is only one aspect. We should also analyze how enterprises make profits, whether they need a lot of research and development to remain competitive, and whether they need wealth leverage to make profits. Through the information excavated from the income statement, we can judge the driving force of this enterprise's economic growth, because the source of profit is more meaningful than the profit itself.