How to analyze a company financial statement?

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It really depends on the industry/type of company you are trying to analyzing, but generally what you want to see is stability and consistency in growth.

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1. Analyze business model in general (How do they make revenue, how do they spend expenses, are they a volume seller or premium seller etc.)
2. Analyze the management (Is the management honest with their words, are their background relevant? Do they have skin in the game, meaning do they have a huge % of their compensation in salary or stock options?)
3. P/E is not as good because it can be distorted based on different debt levels. (All things equal, if a company has higher debt, it will lower the p/e becuase P/E is an net income multiple. So a lower P/E does not necessarily mean a company is undervalued.) Other Multiples like EV/Ebit or EV/EBITDA might be slightly better
4. Stable margins and growth in margins (Gross profit margin, Net profit margin)
5. Earnings growth (Generally stocks that breakout in price usually come after multiple quarter on quarter growth in revenue and earnings)
6. Revenue growth (Make sure revenue growth is from operating profit not any one time huge sale of assets etc.)
7. Debt to Equity ratio (Industry dependent of what is a good D/E ratio)
8. Return on Equity (ROE)
9. Return on Invested Capital (ROIC)
10. Return on Assets (ROA, better for industries that have more machinery, manufacturing etc.)

*Read MD&A sections of Annual reports, and if possible read as much as all of the annual reports of the companies you are interested in, but do focus on certain sections. (You can do a search on what sections are more important)