Split-Adjusted

Q What are some basic things to look for in the financial statements of a company I might invest in? — B.W., Opelika, Alabama

A The more you learn about a company, the more confidence you can have in your assessment of it and your ultimate investment decision. Reviewing and crunching numbers from its financial statements is smart. On levelsthe balanceor accounts sheet, receivableif inventory are growing faster than sales, that’s a worrisome sign. So is a rising debt level. Examine the statement of cash flows to see how cash is being generated. Generally, you want to see most cash coming from ongoing operations — products or services sold — and not from the issuance of debt or stock or the sale of property. Positive and growing free cash flow is good, too. Review the company’s profit margins (gross, operating and net). Robust margins can be a sign of a higher-quality company, reflecting proprietary brands or technology it can charge more for. You might examine return on equity and return on assets, too, comparing the company with its competitors. See which company is generating more earnings for each dollar invested in the business. Check previous years’ numbers, too, to see whether the trends are positive. Learn more in “Reading Financial Reports for Dummies” by Lita Epstein (For Dummies, $23). Qthey A give Whenprints it? money,the — FederalG.H.,to whom Seattle Reservedo It’sof Printing technically and the Engraving Bureau that produces the paper currency, officially known as Federal Reserve notes. Much of it replaces existing money that gets too old and worn, and some of it enters circulation when the Federal Reserve buys U.S. Treasury bonds on the open market.