Want to know the difference of your company's annual report and financial statements means? Well you have come to the right place. I have made a plan on how to teach even a caveman to get rich. How to take the financial statements of a company and carefully analyze them to determine what the stock is truly "worth" will be a simple task after this. I will show you how to make better investing decisions by helping you avoid the costly mistake of purchasing a company when its share price is too high.

After reading, printing, and studying my guide, you will be able to pick up a balance sheet and really understand what all of those numbers mean. You are going to look at why stocks exist and explain how a business goes from being a family-owned company to a "Wal-Mart". First, you will have to learn what these symbols and words mean. EPS, which stands for earnings per share. In lamens terms this means amount of profit each share has earned, or entitled. GP, this stands for going public. This literally means that a company is going to open up some shares to the public. Then there is Market Cap, which means the amount of money you would have to pay if you bought every share of stock in a company. To find this out just multiply the amount of shares to share price. Now lets not forget about the most important word, SHARES. A share represents an investor's ownership in a "share" of the profits, losses, and assets of a company. It is created when a business chops itself into pieces and sells them to investors (like you) in exchange for capita. Also with each Publicly shared company there comes a Ticker Symbol. This is basically a small group of letters that represent the company. For ex. Google.com is GOOG. While the stock market can be a great source of income for many people, it can also be a tangling mess for others. The average person falls into one of two categories. The first group thinks investing is like gambling. These people are stuck on thinking that you will loose your money if you invest. More often than not, this group is influenced by experiences from friends and family. The second group is made up of those who know they should invest for the long run, but do not know where to start. Most of the time, these people leave their money to the so-called "Professionals."

Now that you know a little more on how the stock market works, you are going to take a closer peek at the individual stuff that make the market go wild. Understanding this will help you to take lead of the behavior that sometimes affects your portfolio. Here are a few more terms you need to digest before you can understand a little better. Bear Market the stock market in general has falling prices. Broker: A person who buys or sells shares for you for a nominal fee. Bull Market: Market is rising. Laws of supply and demand adversely affect the stock market. Now that you know all this let me teach you how to read a balance sheet. You must remember that for every business, there are three important financial statements you must look at. The Balance Sheet, the Income Statement, and the Cash Flow Statement. The balance sheet tells you how much money the company has, how much debt it owes, and what your share is. The cash flow statement is like a business' checking account. It shows you where their money is going. The income statement is a shows the company's profitability. It tells you how much money a corporation has made, or even lost.

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