How to Read Between the Lines of a Financial Report

At AcceleRISE 2025, Leon Motmans of ASSA ABLOY shared tips for how to read a financial report with purpose and use numbers to influence smarter decisions.

“Have you ever looked at a financial report and thoughts, now what?” said Leon Motmans, ASSA ABLOY Opening Solutions’ vice president and chief financial officer, commercial segment, at the 2025 AcceleRISE conference.

In an insightful presentation, Motmans shared helpful tips on how young professionals—or anyone not used to analyzing financial numbers—can make sense of a financial report and use it to evaluate the financial health of a company and tell whether the organization is thriving or just surviving. These strategies can help security industry professionals make more informed decisions about companies they may want to work for or want to join.

There are lessons to be learned from companies that failed in years past, like Enron, which aggressively pursued complex financial engineering and hid its debt off balance sheet, going bankrupt in 2001 and losing $74 billion and over 20,000 jobs; Lehman Brothers’ “illusion of strength”  until its 2008 collapse and the company’s rewarding of aggressive growth over sustainable risk management; and BlackBerry’s financial focus on hardware profitability and underinvestment in software innovation, leading it to be leapfrogged by Apple and Android platforms. Motmans highlighted how Apple created operational value by locking in its supply chain early with strategic investments, using “financial insight … to support and enable operational advantage, not constrain it.”

Here’s a helpful breakdown of key basics and fundamentals of understanding financial reports:

• The U.S. Generally Accepted Accounting Principles (GAAP) are an official set of rules and guidelines to prepare financial reports in the United States. They ensure consistency by making sure all companies report their finances the same way, and they promote transparency by providing clear and honest financial information.
• There are a few key differences generally between private and public companies. Private companies are owned by a few individuals, whereas public ones are owned by the public. Private companies have no public stock, while public companies are traded on stock exchanges. Private companies have less regulation than public companies, which are highly regulated.

Motmans highlighted the “big three” of financial documents and what security professionals should know about each:

• An income statement tells you how much a company made and spent over a specific period of time (e.g., a month, quarter or year). The top line indicates revenue, the middle indicates operating expenses and the bottom line equals net profit or loss.
• A balance sheet shows everything a company owns and owes and the value left over for shareholders. This document is recorded at a moment in time, typically at the end of the year. Key elements of a balance sheet are:
  • Assets: Everything a company owns—typically shown in four sections, including current assets, investments, property and equipment and intangible assets
  • Liabilities: Everything a company owes—typically shown as current liabilities and long-term liabilities
  • Equity: The value left for shareholders and stockholders once assets and liabilities are accounted for (assets minus liability), or “what’s yours, free and clear”
• A cash flow statement answers the question, “Is this company actually bringing in money?” Key elements of a cash flow statement are operating activities (day-to-day business), investing (equipment and acquisitions) and financing (loans, dividends and stock buybacks).

This “60-second toolkit” can help professionals make sense of financial documents:

• Look at the three-year revenue trend—is it growing, stable or declining?
• Check profit margins—are they healthy or squeezed?
• Examine the debt level—is it manageable or concerning?
• Verify the cash position—is it strong or weak?
• Consider the industry context—is it growing, maturing or declining?

Motmans also shared “red flags” to watch out for when thinking about joining or working with a company:

• Declining revenue while expenses stay flat
• Profit margins shrinking consistently
• Debt growing more quickly than revenue
• Negative cash flow despite profits
• Major changes in accounting methods

“Financial statements tell stories, not just numbers,” said Motmans. “Context matters—understand the industry [and] use [this] toolkit for client assessment and career decisions.”