300 Questions to Ask About Financial Statements

Financial statements are like the company’s report card, showing you the grades on money matters. But just glancing at these numbers won’t tell you much. You have to know the right questions to ask.

Dive in to find out what you should be asking to really understand a business’s financial health. 

About Profit or Loss

1. What was the company’s net profit for the last quarter?
2. How does the current profit compare to the profit from last year?
3. What contributed to any increase or decrease in profit?
4. Are the profits consistent over the past few quarters?
5. What percentage of revenue turned into profit?
6. Are there any unusual or one-time items affecting profit?
7. How much money was spent on operating expenses?
8. What were the biggest expenses that affected profit?
9. Were there any layoffs or restructuring, and how did that affect profit?
10. How much tax did the company pay?
11. Were there any major legal or financial issues that affected profit?
12. Is the company reinvesting its profits? If so, how?
13. How much was spent on research and development?
14. What is the company’s strategy to improve profits in the future?
15. Were there any major sales or deals that significantly boosted profit?
16. How do currency fluctuations affect the company’s profit?
17. Is the company dependent on a particular season for its profits?
18. How much money did the company make from its various product lines?
19. Were there any discontinued operations, and how did that affect profit?
20. How much did the company spend on marketing and advertising?
21. Is the gross profit margin improving or declining?
22. What was the company’s operating profit margin?
23. Are there any non-operating income or expenses that affected profit?
24. How does the company’s profit compare to its competitors?
25. Were there any asset sales, and how did that affect profit?
26. How does the company handle depreciation and amortization?
27. Were there any major capital expenditures?
28. What is the company’s return on assets?
29. How is the company handling its debt, and what impact does it have on profits?
30. What is the earnings per share (EPS), and how has it changed over time?

About Revenue

1. What is the total revenue for the latest quarter or year?
2. How does this quarter’s revenue compare to the same quarter last year?
3. What are the main sources of revenue for the company?
4. Is the company’s revenue growing or shrinking?
5. What percentage of revenue comes from new customers?
6. How much revenue is coming from recurring or long-term contracts?
7. What was the cost of goods sold, and how does it relate to revenue?
8. Are there any seasonal trends that affect the company’s revenue?
9. How much revenue is generated domestically versus internationally?
10. What was the average deal size or transaction value?
11. Does the company rely heavily on a few key customers for its revenue?
12. Are there any customer refunds or returns affecting revenue?
13. How is the company adapting to market changes to maintain or grow revenue?
14. What impact do exchange rates have on revenue?
15. Does the company have any partnerships or alliances that boost revenue?
16. What are the sales and marketing strategies to increase revenue?
17. How effective are the company’s pricing strategies?
18. Are there any new markets the company is planning to enter?
19. Has the company launched any new products or services recently?
20. Are there plans for mergers or acquisitions to increase revenue?
21. How does the company’s revenue performance compare to industry benchmarks?
22. Are there any regulatory changes that could impact future revenue?
23. How much is spent on sales commissions and incentives?
24. What is the customer lifetime value, and how does it affect revenue?
25. Are there any government grants or subsidies included in the revenue?
26. How much revenue is generated online versus in physical locations?
27. What is the company’s market share?
28. Are there any planned promotions or discounts that might affect future revenue?
29. What are the revenue forecasts for the next quarter or year?
30. Are there any potential risks or uncertainties that could impact revenue?

About Expenses

1. What are the company’s total operating expenses?
2. How do the current expenses compare to the same period last year?
3. What are the biggest expense categories?
4. Is the company spending more on raw materials?
5. How much is spent on employee salaries and benefits?
6. Are there any recent changes in rent or lease expenses?
7. What are the utility costs, like electricity and water?
8. How much is the company spending on insurance?
9. Are there any travel and entertainment expenses?
10. What are the maintenance and repair costs?
11. Are software and technology expenses going up or down?
12. How much is spent on professional services, like lawyers or consultants?
13. Are there any franchise fees or royalties that need to be paid?
14. How much is spent on marketing campaigns?
15. Are there shipping and freight costs?
16. Are there any bad debts or write-offs?
17. What are the interest expenses on loans or credit?
18. Are there any penalties or fines that were paid?
19. Did the company give any charitable donations?
20. Are there any grants or incentives the company is receiving that offset expenses?
21. What is the cost of customer acquisition?
22. Are there any outsourcing or subcontracting expenses?
23. Is the company taking steps to reduce energy or waste costs?
24. What are the storage or warehousing costs?
25. Are there any training or development costs for employees?
26. How much does the company spend on research and development?
27. Are there any significant changes in taxes or tariffs affecting expenses?
28. What are the costs related to health and safety compliance?
29. Are there any depreciation or amortization expenses?
30. Is the company planning any major capital investments soon?

About Debt

1. What is the total amount of the company’s debt?
2. How has the debt level changed compared to the last reporting period?
3. What kinds of debt does the company have (short-term, long-term, etc.)?
4. What is the average interest rate on the company’s debt?
5. Are there any upcoming debt payments or maturities?
6. Does the company have enough cash to pay off its short-term debt?
7. How does the company’s debt compare to its equity?
8. Is the company taking on more debt to finance growth?
9. What are the terms and conditions of the company’s loans?
10. Are there any covenants or special rules tied to the debt?
11. How does the company’s credit rating affect its debt?
12. Has the company ever defaulted or missed a payment?
13. Is the company refinancing any of its existing debt?
14. Are there any secured or collateralized debts?
15. Does the company rely on a line of credit?
16. What percentage of revenue goes to servicing debt?
17. Are there any debt-related tax benefits the company is utilizing?
18. Is the company in compliance with all debt agreements?
19. What is the plan for paying off existing debt?
20. Could the company face penalties for paying off debt early?
21. How does the company’s debt level compare to competitors?
22. Is the company issuing bonds, and what are their terms?
23. Are there any convertible debts that could turn into equity?
24. How does interest rate fluctuation affect the debt?
25. Are any debts denominated in foreign currencies?
26. What impact would a change in credit rating have on existing debt?
27. Are there off-balance-sheet liabilities or contingent liabilities?
28. Are there any government loans or grants affecting debt levels?
29. What would happen to the debt if the company were to merge or be acquired?
30. Is the company’s debt strategy aligned with its overall financial goals?

About Cash Flow

1. What is the net cash flow for the latest period?
2. How much cash is coming from operating activities?
3. How much cash is being used for investing activities?
4. What’s the cash flow from financing activities?
5. Is the company generating positive or negative cash flow?
6. How do current cash levels compare to the previous year?
7. What are the biggest sources of cash for the company?
8. Where is most of the company’s cash going?
9. Are there any large, one-time transactions that affected cash flow?
10. How much cash is the company holding onto?
11. Is the company generating enough cash to cover its expenses?
12. Does the company have a cash reserve for emergencies?
13. How does the company manage its cash flow cycles?
14. Are receivables being converted into cash in a timely manner?
15. How quickly is inventory turning into cash?
16. Does the company have enough cash for future growth?
17. What dividends or shareholder payouts were made?
18. Did the company buy or sell any major assets?
19. Were there any stock buybacks?
20. How much is spent on capital expenditures like equipment or property?
21. Are there any loan repayments?
22. What was the cash flow per share?
23. How are seasonal trends affecting cash flow?
24. Did the company invest in any new ventures or partnerships?
25. Are there any red flags like declining cash reserves?
26. How does cash flow relate to the company’s debt situation?
27. What is the free cash flow, and what does it signify?
28. How does the company’s cash flow compare to its competitors?
29. Are there any expected changes in cash flow due to market conditions?
30. What are the company’s plans for excess cash?

About Assets

1. What are the total assets of the company?
2. How do the current assets compare to last year?
3. What is the breakdown between current and non-current assets?
4. How much cash and cash equivalents does the company have?
5. What’s the value of the company’s inventory?
6. How much is tied up in accounts receivable?
7. Are there any intangible assets like patents or trademarks?
8. What’s the value of the company’s real estate holdings?
9. Does the company own any significant equipment or machinery?
10. Are there any leased assets, and what are their terms?
11. How often does the company revalue its assets?
12. Are there any impaired or depreciated assets?
13. What kinds of investments does the company hold?
14. Are there any restricted or reserved assets?
15. How quickly are assets being converted to cash?
16. What percentage of assets are financed by debt?
17. Does the company have enough liquid assets to cover short-term obligations?
18. What are the key assets that generate revenue for the company?
19. Is the company acquiring new assets?
20. Are there any plans to sell off assets?
21. How are assets distributed geographically?
22. What is the asset turnover ratio?
23. Are there any idle or underutilized assets?
24. Does the company hold any crypto-assets or digital assets?
25. Are there any joint ventures or partnerships counted as assets?
26. Are there any collaterals against loans or lines of credit?
27. What security measures are in place to protect physical assets?
28. How are technological assets managed and updated?
29. Is there any goodwill listed in the assets?
30. What is the condition of the company’s long-term assets, like buildings or land?

About Liabilities

1. What is the total amount of liabilities the company has?
2. How do current liabilities compare to the previous year?
3. What’s the breakdown between current and long-term liabilities?
4. How much is owed to suppliers or vendors?
5. Are there any outstanding loan payments?
6. What are the deferred revenue amounts?
7. Are there any accrued expenses like wages or taxes?
8. What is the total amount of credit debt?
9. Does the company have any pension or retirement obligations?
10. Are there any outstanding legal liabilities or pending lawsuits?
11. Is the company meeting its short-term debt obligations?
12. What are the lease liabilities?
13. Are there any unsecured liabilities?
14. What is the interest rate on the existing liabilities?
15. Are there any covenant restrictions on the company’s liabilities?
16. How does the company plan to pay off its liabilities?
17. Are there any off-balance-sheet liabilities?
18. How much working capital does the company have after liabilities?
19. Are there any liabilities related to discontinued operations?
20. What’s the company’s debt-to-equity ratio?
21. Are there any convertible bonds or debts?
22. How much is set aside for warranty liabilities?
23. Are there any environmental cleanup liabilities?
24. Does the company have any tax liabilities?
25. Are there any customer deposits counted as liabilities?
26. Are there any revenue-sharing agreements affecting liabilities?
27. What is the company’s contingency plan for paying off liabilities?
28. How are currency fluctuations affecting the company’s liabilities?
29. Are there any government or regulatory fines included in liabilities?
30. What impact would a merger or acquisition have on the company’s liabilities?

About Future Projections

1. What is the projected revenue for the next year?
2. Are the future projections conservative or optimistic?
3. What are the expected profit margins?
4. Is the company planning any big investments?
5. What’s the growth rate the company is aiming for?
6. Are there plans to enter new markets?
7. What are the projected operating expenses?
8. How is the company planning to reduce debt?
9. Is the company expecting to hire more staff?
10. Are there plans to launch new products or services?
11. What capital expenditures are forecasted?
12. Are there any plans for mergers or acquisitions?
13. How is the company planning to improve cash flow?
14. What is the company’s strategy for risk management?
15. Are there expected changes in the cost of goods sold?
16. Are there any planned changes to the pricing strategy?
17. How does the company plan to deal with economic uncertainties?
18. Are there any revenue diversification plans?
19. What are the projections for market share?
20. Are there plans to pay dividends or buy back shares?
21. What’s the plan for dealing with fluctuations in currency exchange rates?
22. Are there any anticipated changes in tax obligations?
23. What are the goals for customer retention and acquisition?
24. What impact will technology advancements have on future projections?
25. Are there any contingencies for unexpected challenges?
26. How is the company planning to adapt to regulatory changes?
27. Is there a focus on environmental sustainability in future projections?
28. Are there any planned partnerships or collaborations?
29. How often are projections updated?
30. How accurate have past projections been?

About Ratios

1. What is the company’s current ratio, and does it indicate good liquidity?
2. What’s the quick ratio, and how does it differ from the current ratio?
3. Is the debt-to-equity ratio rising or falling?
4. What’s the return on equity (ROE) for the current period?
5. How does the company’s price-to-earnings (P/E) ratio compare to its competitors?
6. What’s the gross margin ratio, and what does it say about profitability?
7. What is the company’s earnings before interest and tax (EBIT) margin?
8. How is the asset turnover ratio trending?
9. What’s the inventory turnover ratio, and is it improving?
10. How does the company’s net profit margin compare to the industry average?
11. What’s the return on assets (ROA), and is it going up or down?
12. What is the interest coverage ratio?
13. What’s the dividend yield for current shareholders?
14. Is the company’s operating margin stable, improving, or declining?
15. What’s the receivables turnover ratio?
16. What’s the payout ratio, and what does it say about dividend sustainability?
17. How does the company’s operating cash flow ratio look?
18. What is the current enterprise value to EBITDA ratio?
19. What’s the company’s book value per share?
20. Is the debt ratio trending in a safe direction?
21. How does the company’s price-to-book (P/B) ratio compare to its peers?
22. What’s the cash conversion cycle, and is it efficient?
23. What’s the return on investment (ROI) for recent projects?
24. How is the company’s times interest earned (TIE) ratio?
25. What is the equity multiplier, and what does it indicate?
26. What is the fixed charge coverage ratio?
27. Is the company’s price-to-sales (P/S) ratio above or below industry standards?
28. What’s the days sales outstanding (DSO) ratio?
29. What is the capitalization ratio, and is it sustainable?
30. How do the company’s ratios align with its long-term financial goals?

About Equity

1. What’s the total shareholders’ equity?
2. How has equity changed since the last financial period?
3. What’s the retained earnings balance?
4. Were there any stock splits or dividends recently?
5. How many types of stock does the company have, like common or preferred?
6. How many shares are currently outstanding?
7. Is the company issuing new shares?
8. What’s the book value per share?
9. Are there any restrictions on equity, like buyback agreements?
10. Is there a separate reserve fund within equity?
11. What’s the company’s dividend policy?
12. Are there any other forms of shareholder payouts, like share buybacks?
13. Were there any equity investments from outside parties?
14. Did the company repurchase any of its own shares?
15. Are there any convertible securities affecting equity?
16. What is the accumulated other comprehensive income?
17. What’s the tangible book value?
18. What is the intrinsic value of a share based on equity?
19. Is the company financed mostly by debt or equity?
20. What’s the ratio of owner’s equity to total assets?
21. Were there any changes in stock option plans?
22. How are employee stock options accounted for?
23. Are there any special rights for preferred stockholders?
24. Were there any changes to the articles of incorporation affecting equity?
25. What are the equity contributions by the owners or partners?
26. Are there any planned or past equity audits?
27. How are the dividends taxed?
28. What’s the historical trend of the equity account?
29. Were there any revaluations of assets that affected equity?
30. How does the company’s equity position compare to competitors?

Frequently Asked Questions

How do liabilities affect a company’s financial health?

Liabilities are obligations the company needs to fulfill. High liabilities compared to assets can be a red flag. Look out for things like long-term loans, unpaid taxes, and supplier debts.

What should I look for in the assets section?

For assets, focus on:

• Current vs. non-current assets: Current assets are easily converted to cash.
• Tangible vs. intangible assets: Tangible are things like machinery; intangible are things like patents.

Why are future projections important?

Future projections give you a glimpse of where the company thinks it’s headed. They show planned investments, expected revenue, and other key insights. But remember, they’re estimates, so always take them with a grain of salt.