By David Harper 
(Contact David)

Let's summarize the ideas discussed throughout this tutorial according to a few major themes:

Let the Business Model Shape Your Focus Areas
The average 10-K annual report is stuffed with dozens of dense footnotes and adjusted numbers offered as alternatives to the recognized numbers contained in the body of the income statement and balance sheet. For example, companies often disclose six or eight versions of earnings per share, such as the "as reported," "adjusted," and "pro forma" versions for both basic and diluted EPS. But the average individual investor probably does not have the time to fully assimilate these documents. 

Therefore, it may be wise to first look at industry dynamics and the corresponding company business model and let these guide your investigation. While all investors care about generic figures, such as revenue and EPS, each industry tends to emphasize certain metrics. And these metrics often lead or foreshadow the generic performance results.

The table below illustrates this idea by showing some of the focus areas of a few specific industries. For each industry, please keep in mind that the list of focus areas is only a "starter set"--it is hardly exhaustive. Also, in a few cases, the table gives key factors not found in the financial statements in order to highlight their shortcomings:

1. Non-Recurring Gains - These include gains due to the sale of a business, one-time gains due toacquisitions, gains due to liquidation of older inventory (that is, liquidation of the LIFO layer), and temporary gains due to harvesting old fixed assets, where lack of new investment saves depreciation expense.
2. Gains Due to Financing - These are important because, while they are real gains, they are often random variables that depend on market conditions and they may be reversed in future years.

1. In the Income Statement: Conservative revenue recognition is shown by things like no barter arrangements, no front-loaded recognition for long-term contracts, a sufficient allowance for doubtful accounts (that is, it is growing with sales), the choice of LIFO rather than FIFOinventory costing method and the expensing of rather than capitalizing of R&D expenditures.
2. In the Balance Sheet: Conservative reporting practices include sufficient cash balances; modest use of derivative instruments that are deployed only to hedge specific risks such as interest rate or foreign currency exchange; a capital structure that is clean and understandable so those analyzing the statements don't have to sort through multiple layers of common stock,preferred stock and several complex debt instruments; and a debt burden that is manageable in size, not overly exposed to interest rate changes, and not overly burdened with covenants that jeopardize the common shareholders.

http://www.investopedia.com/university/financialstatements/financialstatements10.asp