Look out for bad debts in those financial statements.
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Can debts be good? Most often commoners, while reading financial statements make the mistake of assuming, debts to be always bad for the company. This is of course a misconception. Debts can be a very powerful tool for financing a company, if your purchase through debts results in appreciating financial value of your company in future. These are called good debts. What is bad is when you read a bad debts . Theses bad debts are those which, when your prediction on your debt has gone completely wrong and these debts that you incurred are not going to help you appreciate any value for your company.
