The balance sheet

A conversation you overhear at Denny's while eating breakfast suggests that a new technology company stock is a steal.  A stockbroker tells you to buy now or it may be too late.  Your wife/husband/uncle/niece/army buddies chime in with opinions.   Should you purchase or not?

Before any purchase decision you must look at the company's balance sheet.  Companies on major stock exchanges and others are required to produce quarterly financial reports for external viewing.  One of those reports is the balance sheet, or statement of position.  It shows the assets, liabilities and stockholder's equity of the company on a particular date.  A little online research on how to read this document should enable you to generally determine whether the company is in good or bad financial health.