How to assess financial state of a company?

The same way you assess your financial state. First you need to know what are your assets? Probably the answer would be, a house, a car, ... Everything you own has some value. If you add up those numbers you will get Total assets, but your mortgage will certainly pop up in your mind. Thats right, you need to know what are your liabilities? Probably mortgage, car payment... Add up all those numbers and you will get total liabilities. If you subtract total liabilities from the total assets you will get total equity.

That's nice but where is my salary and other income? If you add up all payments that you have received in a certain period, you will get total income for that period, also called revenue. You have probably noticed that you cannot spend all that money. First you should set aside money for mortgages, taxes, car payment, ... If you add up those numbers you will get Total Expenses. If you subtract Total Expenses from Revenue you will get Net income. That income you can spend on food, clothing, vacation, ...

If you want to assess financial state of a company, you should use the same method. Total liabilities and Total assets are found in Balance sheet of the company, while information about income and outcome is found in the Income statement. You can find all those data on the http://www.sec.gov.
Balance sheet carries information about worth of the company on a certain date. In Income statement you can find information about income and outcome for a certain period of time. To fully assess the financial state of a company you should compare all those figures in a time line perspective: Is profit increasing or decreasing? Are total assets rising or not. Also you should compare all these parameters to other companies from the same industry.

What are good signals?
- Increasing revenue -- meaning more money
- Decreasing expenses -- optimization of the production process (with less you can achieve the same or even more)
- Increasing Total assets -- more money for each shareholder
- Decreasing Total liabilities -- less money for debts
- Log term liabilities increase over Short term liabilities -- Long term liabilities are usually less expensive than Short term liabilities

What are bad signals?
The opposite of good signals.
- Decreasing revenue -- meaning less money
- Increasing expenses -- you need more to produce the same
- Decreasing Total assets -- Less money for each shareholder
- Increasing Total liabilities -- More money for debts
- Log term liabilities Decrease over Short term liabilities -- Long term liabilities are usually less expensive than Short term liabilities