If you're trying to learn a lot about a company in order to decide whether you want to invest in it, don't neglect its financial statements. A balance sheet, income statement, and statement of cash flows can tell you a lot about the firm's current health, as well as its profitability.

Beyond that, though, you can also learn a lot by whipping out your trusty magnifier and scrutinizing footnotes. That's what Michelle Leder at footnoted.org does all the time -- frequently with fascinating results. Check out some recent findings:

  • In a Sharper Image (NASDAQ:SHRP) filing, you can gain some insight into outgoing CEO Richard Thalheimer, who is receiving $1.7 million in severance pay, $3.9 million in retirement benefits, and $300,000 to cover the cost of office space and secretarial support for the next three years. (Does this mean he doesn't expect to have a new job, with its own office and secretary, over the coming three years?) Thalheimer noted in the filing that he wanted two sculptures from his office, one of "3CPO" and one of Superman, for which he'd pay the company 50% of their total retail price of $20,000.
  • Many companies like to file less-than-flattering information late on a Friday, hoping that as few people as possible will get around to reading it. That may have been what Yahoo! (NASDAQ:YHOO) was thinking when it revealed on a December Friday that outgoing COO Daniel Rosensweig will be receiving his salary through 2007, plus a three-year extension on his 825,000 stock options. This kind of information can help us investors see the degree to which companies are putting shareholders first.
  • You may or may not know that the Securities and Exchange Commission (SEC) often sends companies letters outlining concerns and making requests. It's long been hard to find copies of these letters at the SEC website, but things have improved. Leder shows us how to find, as an example, letters to Ford's (NYSE:F) CFO, questioning, among other things, the company's dealings in Iran, Sudan, and Syria. (See the .pdf file for the letter, or look up other companies' correspondence.) She noted that while Ford had mentioned the letters in its own filings, neither Apple (NASDAQ:AAPL) nor IBM (NYSE:IBM), which also received letters, seem to have disclosed them in filings of their own. This suggests that it can be smart to go looking for such letters instead of waiting to be informed about them.
  • For 2006, Leder's Footnote of the Year went to Aaron Rents: "...getting the company that you work for to spend nearly $1 million teaching your sons to be race-car drivers as Aaron's executive Bill Butler did is an interesting use of shareholder money. But calling it a marketing expense really reached a new nadir."
  • Lest you think it's all bad news in the footnotes, Ms. Leder actually awarded two gold stars recently. E*Trade Financial (NASDAQ:ETFC) received one, for having decided to "eliminate the tax gross-up that executives would receive following a change-in-control both in 2007 and in all years going forward." (Learn about gross-ups in this article on Oprah.) Keithley Instruments (NYSE:KEI) earned the second star, for saying that due to the "costs and management time incurred by the company" on a backdating investigation, a 2006 bonus or a salary increase and options for 2007 would not be forthcoming for either Chairman and CEO Joseph Keithley nor CFO Mark Plush.

By now you should be excited about all the things you can learn in company footnotes. If, instead, you're thinking that you don't have time to scour financial reports, consider letting others do some or all of the work for you -- by investing in top-notch mutual funds run by smart managers, or by taking advantage of the stock research provided in our investing newsletters, all of which you can try for free. (I suspect their performance will impress you.)

Yahoo! is a Motley Fool Stock Advisor recommendation.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.