Imagine you work as a financial advisor. Your new client has some spare money, but he does not possess the necessary knowledge about investment. He would like to buy stocks and needs your expertise on which company to invest in.

1. Explain in your own words to your client why investors need to analyze a companys financial statements before investing in its stock.
2. In your opinion, which financial ratios are the most useful for an investor in order to determine whether it makes sense to invest in a particular companys stock? Identify at least 3 ratios. Explain in your own words what they mean and how they are computed.
3. Search on the Internet and identify a company stock you would recommend to your client to invest in. Find and download the companys most recent financial statements. Based on them, compute the financial ratios you indicated in your Question 2 answer. Make sure to demonstrate how you calculate them.