No, you don’t need to know how to read financial statements in order to buy stocks. However, it is a good idea to learn the basics of reading financial statements and understanding them. Learning how to read financial statements will help you make better decisions when looking at stocks.

Below is a list of questions you need to ask yourself when looking at a company’s financial statements.

Are my assumptions about the company and its business realistic? What promises does the company make for returns and revenue?

Is this forecast reasonable, or could it be too high? What is the target customer for this product/service, and how would they use it? What are their relationships with other companies in similar industries like theirs, and what do those relationships look like from a distance?

How do they stand out from their competitors? What are the leaders of the company doing to grow their business in a sustainable way, both within and outside their industry? They are not willing to compromise on their values and have been recognized for their commitment to ethical manufacturing practices.

They use recycled materials and products in their manufacturing process. They are the first company to introduce the “Mettalic” watch. The Mettalic is made from 99% recycled aluminum and is designed for use in a wide range of environments.

American Water Spout Diversion. The American Water Spout Diversion is designed to divert water away from a building foundation by diverting it into a 1/2″ spout. The spout is connected to a rigid hose that leads to an exterior outlet.