Financially Impact the Bottom Line

Reading and understanding the company's financial statements can yield insight into how IT's future spending activities will be impacted. Figuring out how IT impacts the company's financial statements is no simple task. The first step is understanding how to read the statements. For background information on reading the Income Statement and Balance Sheet, refer to the McLean Report research notes, “Income Statements: The Crystal Ball of Vendor Viability” and “Spotting Balance Sheet Red Flags.” While these notes focus on the evaluation of vendor's financials, they provide a good basis for starting to master financial statement interpretation.