AAII

1. A company’s annual detailed financial statements include:

Balance sheets of assets and liabilities

Income statements

Statements of shareholders’ equity

Cash flow statements

All of the above

2. Where do you find other important information about the company that may impact its finances, such as depreciation schedules, litigations, and investment with other companies?

The notes to the financial statements

The firm’s press releases

The prospectus

3. The more sources to collect data from the better.

True

False

4. To estimate next year’s earnings per share, you need to:

Take last year’s earnings and increase by 2%

Calculate the past growth rate in earnings

Get an earnings forecast from the company

QUIZ: How to Judge a Stock