How should one prepare for analyzing financial statements, balance sheets, and assessing limits?

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To prepare for analyzing financial statements and balance sheets, one should have a strong understanding of accounting principles and financial ratios.

Understand basic accounting principles such as revenue recognition, accrual accounting, and matching principle.
Familiarize yourself with financial ratios like liquidity ratios, profitability ratios, and leverage ratios.
Learn how to interpret key financial statement components such as income statement, balance sheet, and cash flow statement.
Practice analyzing financial statements of different companies to gain experience and improve skills.
Stay updated on industry trends and economic factors that may impact financial performance.

How should one prepare for analyzing financial statements, balance sheets, and assessing limits?

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