How can I do analysis on financial statements?

You need to focus on the following aspects.

a)     Profit fluctuation as compared to prior years

b)     Relationships between the compensation to board of directors and sales or profits

c)     Management discussion and analysis in their annual report

d)     Non-operating items

e)     Other irregularities such as qualified auditors’ opinion, significant items in financial statement not in line with business, contingencies, etc.