The company report to the world
Every year listed companies are required by law to publish an annual report. It is your most important source of information as an investor.
"Numbers never lie — but those who do not understand them can be deceived by them. Learn the language of money and you will always know where you stand."— Florence Scovel Shinn
The three most important parts
Income statement
Shows revenues, costs and profit for the year. Did the company make money this year?
Balance sheet
Shows what the company owns and what it owes. Is the company solid?
Cash flow statement
Shows actual money flows. Does the company have real money?
Rule of thumb: Income statement = what it earns. Balance sheet = what it has. Cash flow = what it actually receives.
Key figures to look for
- Revenue growth: Is turnover growing year on year?
- Gross margin: How much does the company earn on each sale?
- Free cash flow: Is the company generating real money after investments?
- Return on equity (ROE): Above 15% is good.
Red flags to watch for
Profit without cash
Company shows profit but cash flow is negative. Be careful.
Rapidly growing debt
Debt grows much faster than revenues. Dangerous signal.
Important: Learn to distinguish between operating profit and one-time gains.
Where to find annual reports
- Oslo Stock Exchange — euronext.com/en/markets/oslo
- The company website — under Investor Relations
- Yahoo Finance — financial key figures simply presented
"Those who understand the numbers behind things see a world others are blind to. Numbers are not boring — they are stories written in another language."— Florence Scovel Shinn