The financial statements can reveal much, but there are definitely instances in which the financial statements require contextual understanding for proper interpretation. Without this understanding, the firm's numbers may only reveal raw data. Raw data can be interpreted any number of different ways, so it is essential that qualitative analysis be conducted in order to place the numbers within a framework that will make understanding easier. For example, Landry's is taking on debt, but we know from the company's statements that this is to finance expansion and that hopefully when those properties are open, the returns will begin to improve. How the firm makes money is an important consideration. This can help to not only place past performance into perspective but also to provide greater understanding of the firm's future prospects as well. Competitive advantages can be derived sometimes from the financial statements, but they are typically non-financial factors that are best understood through qualitative analysis. Policies on ethics and corporate governance are less important. While in vogue in recent years, governance is ill-defined and outside of a handful of high profile catastrophes involving criminal behavior (Enron, WorldCom), there is little evidence that "governance" has changed of late or that these changes have a direct impact on the bottom line. While there has been an increase in explicit policies, the actual functioning of governance has changed little, and a...

I am not sure why Landry's doesn't do this in the annual report, since every other company does. But that's just a small adjustment I made for the way they render their numbers.
Return on Assets = Net Income / Total Assets

2003:

$45,901 / $1,102,785 = 0.0416 = 4.16%

2002: $41,521 / 933,015 = 0.0445 = 4.45%

Current Ratio = Current Assets / Current Liabilities

2003: $120,604 / $159,581 = 0.75

2002: 92,669 / 148,354 = 0,62

Asset Turnover = Revenue / Total Assets

Note: Sometimes this is COGS / Total Assets, but in a service industry it is better to use revenues instead of COGS.

2003: $1,105,755 / $1,102,785 = 1.0026 = 1.00

2002: $894,794 / 933,015 = 0.959 = 0.96

Debt to Total Assets = Total Liabilities / Total Assets

2003: $498,234 / 1,102,785 = 0.45

2002: $365,939 / 933,015 = 0.39

Current Cash Debt Coverage = Cash flow from operations / Current liabilities

2003: $121,529 / 159,581 = 0.76

2002: $111,637 / 148,354…