In this module, we'll learn financial statements analysis and financial models. First, I want you to think about some familiar things in your daily life. Supposed to make an appointment with the doctor to get an annual checkup. Your doctor will check your important vital signs, such as your body temperature, pulse rate, rate of breathing, blood pressure, body mass index and others. Based on these vitals, your doctor will have a general idea of whether you are healthy or not. For each vital, there's a healthy range. For example, if your body temperature is in the range of 97 to 99 degrees Fahrenheit, you are considered normal. For some vitals, only the range information is not enough. For example, the healthy range of BMI, body mass index, for adults is between 18.5 and 24.9. But you cannot use this range to evaluate a two year old child. You need to know the age of a person and compare the vital with the same age group. Here you may think these are common sense, but is there anything to do with finance? Yes, what we are learning today is just the vitals of a company. If we want to know whether a company is healthy or not, we also need some metrics to help us make the decision. For each metric, you also need to know what it measures and how to compare it with similar companies or companies in the same industry. This is just like how you compare the BMI of a two year old with the same age group. In the first part of the module, we'll introduce the common size financial statements. We'll cover topics such as how to derive common size balance sheet and common size income statement, how to compare the financial performance of a company over years, and compare one company with another. There are some commonly used financial ratios. Each group of the ratios tell us different aspects of a company. Some financial ratios tell us whether a company can pay us that or not and others show us whether a company is profitable or not. We'll explore these ratios in this model. In addition to that, we want to forecast what will happen in the future. We want to use financial statements to make predictions so that we can make better management decisions.