Financial statements are the principal source of information on the company's financial position, past performance, and cash flows. To be able to interpret financial statements one has to know precisely how they are structured and what they contain. For effective management decisions the manager should be able to track structural changes in assets, liabilities, owners' equity, revenues and expenses, as well as analyze those changes as they occur over time. A manager has to be well-acquainted with ratios and the relationships which exist between key indicators of liquidity, profitability, efficiency, debt, and the financial stability of the firm.