Boxcarrs: I have an accounting background but do not consider myself the stereotypical beancounter. Your past posts sound like you are an adult, serious investor who is not a day trader. That makes you a rare commodity for these boards.
After many years of ups and downs in the stock market, I decided to try to invest in successful companies run by people who wouldn't try to skin their stockholders.
To me, the most important financial statement for determining those things is the balance sheet. If you click on the BALANCE SHEET caption at the lower left margin of the Yahoo quote page the screen will then show comparative balance sheets for that company.
Next, look at the bottom of the statement at the stockholder equity section: (in millions) FLXS Common stock $6,494 Retained earnings 92,552 Capital surplus 2,111 Other 454 ---- Total $101,602
What this means is that of Flexsteel's total accounting stockholders equity of $101,602,000, about $9,000,000 was put into the company and the other $92,500,000 was the result of profits retained in the business. This does not include any of the millions of dollars in dividends paid out to sharehlders over the years. In my mind, this is the sign of a successful company. You start with nine million, pay many millions in dividends and still end up with stockholders equity of $101,000,000.
There can be many major adjustments to stockholders equity that would distort the stockholders equity section of a balance sheet if you didn't do further research, such as stock buybacks, stock dividends etc.
In addition, it doesn't say anything about the future and changes in the economy, management changes, imports from China etc.
If you are interested, you could look at the balance sheets of some of the good companies I have had success with. They are FLXS, IAL, NPK, ITIC, SCX, RYAN, and BRKA.
Then just for fun you could look at the stockholders equity section of the balance sheets of JDSU, TWX, CVC, CHTR, CKR, NTN, MYR etc. (Retained deficits-losses)
I should point out that I am not recommending any of these stocks now, because I think prices are to high and in some cases the world may have changed. However I did use this method to find good stocks during the internet boom years. I owned most of the good stocks during the boom years and they didn't do anything. They did save me from losing any money on dot com stocks. When the internet insanity ended, these stocks all did very well and so did I.
I hope this is of some interest to you even if it is long winded or if you don't understand it all. I feel like I need to vent a little. I have lost my great penpal (you know who).