Reading Company Prospectus

 When reading a company's prospectus, read  

1. Chairman's statement

2. Review of operating and financial performance

3. Board of directors + senior management 

4. And of course...

     Balance Sheet/ Profit and Loss Statement

Profitability Ratio
Gross Profit Margin	Gross Profit/ Revenue
Net Profit Margin	Net Profit/ Revenue
Return on Equity	Net Profit/ Equity
Return on Asset	Net Profit/ Total Asset
Liquidity Ratio
Current Ratio	Current Assets/ Current Liabilities
Quick Ratio	(Cash+ Short Term Investments + Accounts Receivables) / Current Liabilities
Cash Ratio	Cash + Short Term Investments/ Current Liabilities
Solvency Ratio
Debt to Equity Ratio	Total  Debt/ Total Equity
Interest Coverage Ratio	EBIT/ Interest Expense
Solvency Ratio	Net Profit/ Total Debt

Cash Flow Statement

Cash flow from
Operating Activity	Is profit converted to cash?
Investing Activity	Is company too aggressive in investment?
Financing Activity	Is company borrowing to finance investments?