What are the most important parts of a financial statement for an Essay

What are the most important parts of a financial argumentation for an investor to look at when deciding on a long-term financial investing - Essay ExampleIf an investor buys shares of a company whose win have been deteriorating everyplace the years then it is seeming that the impact of the falling profits will also be reflected in the price of its shares. This will chafe the value of the companys shares and the investment will result in losses. For this reason a on the lookout analysis of the financial statements is a must before taking a long position in the shares of the company.The investors must make investments from long term point of view as this gives them the power to exercise mold over their investments. An intelligent investor must not focus on the short term movements in the market rather one should concentrate on intelligent selection (Bogle & Swensen, 2009, pp.40). Ideally the return on a long term investment should be 7% (Campbell et al., 2001). Stocks generall y offer best possible returns over the long term (Bodnar, 2006, pp.121).For the period 1926 to 1998 the common stocks of large companies offered an annual return of 11.2 percent. When compared with other instruments it shows that the stocks offered a seek premium of 7.2 percent annually. Even though the returns earned on large summit and small cap stocks is higher as compared to other assets classes their returns are more volatile. The return on long term bonds issued by US government is 5.3 percent per year i.e. a real return of 2.2 percent. Though the returns on such(prenominal) bonds are less as compared to the stocks but their returns are comparatively less volatile when compared to volatility in stock returns (Reilly & Brown, 2002, pp.92).The financial statements comprise of- Income Statement, Cash flow Statement and Balance Sheet. Income Statement is an estimation of the profits incurred or losses suffered by the business over a specified period of time. Cash hunt down Stat ement is a summary of the net cash position of the business. Balance Sheet is a summarized statement of the assets owned by the business and the liabilities owed by it. Using these