In this first lesson, you will explore financial analysis at a high level, brush up on your knowledge of income statements and prime yourself for any potential pitfalls when reading financial statements.

Reacquaint yourself with the basic building blocks that make up an income statement. In this lesson, we break down these core components, and explore how vertical and horizontal techniques are used to analyze financial data.

The first section of the income statement deals with revenue and profits. In this lesson, we map these to our case study business and explore some of the direct costs of producing and selling goods and services. We will also examine our first ratio: gross margin.

Before reaching the bottom line, businesses must factor in gains and losses made from regular operations. In this lesson, we'll continue to work our way down the income statement, defining terms like OPEX, depreciation and amortization and how these are calculated.

For most businesses, the most important entry on the income statement is the bottom line. In this lesson, we explore the final section of the statement, and the calculations that must be performed to calculate net income.