Start reading the annual corporate report by locating the opening letter from the corporation's CEO. This is a personal letter written from inside the corporation and the focus will always be positive, even if the corporation has had a bad financial year.
Find the corporate balance sheet, which is often located in the beginning of the corporate report. The corporation's assets and liabilities will be part of the balance sheet. While assets are what the corporation owns, liabilities are what the corporation owes.
Look at the corporation's assets. Short-term assets includes cash, inventory lists and cash receivables. Long-term assets include owned property, equipments, plants and any other fixed assets.
Look at the corporation's liabilities. Whether the liabilities are short-term or long-term, they represent everything the corporation owes. To find out what the corporation is worth, divide the corporation's assets with the liabilities. A good financial status is when the assets are twice the amount of the liabilities.
Find the shareholder's equity sum. This is important for shareholders who have something at stake in the corporation. To find out the shareholder's equity, subtract the liabilities from the total assets of the corporation.
Find out where the corporation's money is going by studying the capital graph. This will give you information about the corporation's overall profits in the industry, where the money is going in terms of cash flow, what the corporation spends money on and where.