Old School Value

Cash Flow Statement Analysis: AERO

In this post, I’ll be going over a few basic ideas of what to look for financial statements, not how to read them, for the beginner investor who wants to research or keep up to date with their companies. AeroGrow (AERO) will serve as a very nice example with plenty of warnings signs. The purpose of this post is to help you get the idea of a company’s health and let you decide whether it is worth the extra effort to take the next step and plug in numbers for ratios and other metrics. FYI, I exited my position in AeroGrow with a huge 60% loss even though I had the opportunity to lock in a 20% gain. I made many mistakes on this one (let's just conclude I didn't even read the statements to begin with) and you will see why I had no other choice than to sell once I woke up. Hopefully, you won’t make the same mistake as me.

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