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 the past year, struggling Centennial Communications (NASDAQ:CYCL) sold $550 million in bonds (in other words, borrowed money) and paid a special dividend of $5.52 per share to shareholders. Consider that in the month when the company announced its plans, shares closed around $10 per stub, but have recently traded south of $5. This looks bad enough, but Leder noted that "some of the biggest beneficiaries of the deal were Centennial's top executives. In the summary compensation chart, the company disclosed that CEO Michael Small received $5.66 million in all other compensation, a significant multiple of his salary of $410.7K.... Indeed, as a group, the top five execs wound up with $9.8 million."
  • You may remember that Nike's (NYSE:NKE) CEO William Perez resigned early this year. Leder reported on recently disclosed details about his severance package, saying: "In addition to two years of salary, or $2.8 million, and a $1.75 million bonus, the company spent $3.2 million to purchase Perez' home in Portland and another $578K to cover the cost of renovating and furnishing that home. The cost of Perez' health club in Portland was also unusually pricey since the company reimbursed him another $56.5K for 'athletic club fees.'. all told, Nike investors wound up shelling out over $8 million for Perez' sprint as CEO."
  • I wrote about "The Poetry of Investing" a while back, and footnoted.org found some, too: "Fedders (NYSE:FJC), filed this 8-K and some of the language in outgoing Chairman and CEO Sal Giordano Jr's new employment agreement was downright poetic. As you read this, just imagine a gentle breeze in a field full of flowers: 'the term of this Agreement shall be extended so that at each and every remaining moment of time thereafter, the remaining term of this Agreement shall be one year.'" This is a clever way of making the agreement endless.

By now you should be excited about all the things you'll 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, either by investing in top-notch mutual funds run by smart managers through our Champion Funds newsletter or by taking advantage of the stock research provided in our investing newsletters -- all of which you can try for free.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. The Motley Fool has a full disclosure policy.