Question

When you look at a company's financial statements, what do these mean for a CEO or CFO versus a potential investor (debt to equity, stock price, net revenue, etc)?

Answer 1

Answer ) The company's financial statement give different understanding  to different users , like internal users like CFO or CEO are concern about the profitability of company , while investors in share are more concern about the profitability of share holders (dividend or EPS) .

The interpretation of financial ratios change with the need of party every time, Like:

debt to equity ratio: which indicate management decision to buy assets either by use of equity or debt . CFO would like to  reduce the net capital cost by optimal combination of debt or equity while investors in shareholders would like to increase the amount of dividend or increase cost of capital.

Stock Price : Market price of stock should be high for CFO , which increase the net market capital value. while prospective investors would like to moderate pricing of share in market.

Similarly all other financial ratios would have different meaning and understanding.