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Background Checking Your Business Partners is very important to your economic future.

Private Company Background Check

If it is a small, private company, then find out who the owners are and run background checks on them. You can find out How to Do a Free Background Check.

Private companies are only as healthy as their owners, and maybe less so. So run the background checks on the owners, and simply ask for a financial statement (if it is not publicly available) so you can do some basic financial analysis. If you take the job or partner-up, you are risking your economic future with them, so it would be worthwhile to buy an hour of time with a CPA (Certified Public Accountant) and have him review the financial statements with you.
You can run a Property Check on the Owners. This will tell you what business they own. Check on those companies, too. One of their other companies can still bankrupt the owners of your company.

Financial Analysts often compare Financial Ratios to accepted “good” values.
Such as debt to equity ratio (i.e. how much do they owe compared to how much they are worth.)

There are 30 or 40 common ratios, but
look a few Key Ratios, such as:

•P/E-ratio = Stock price / earnings per share
•return on equity = Net profit / equity
•return on assets = Gross profit / balance sheet total
For your company background check, look at trends:

•Past Performance over years, and recent months. Are the ratios getting better, same, or worse? Are revenue and profit going up.
•Future Performance: You try to predict their future from the trends you see in their long term past, recent past, and from events (such as patent running out, key person dying, or just got a huge government contract.)
•Comparative Performance: Compare their ratios to other similar firms and competitors. With this in mind, go back to finance.yahoo.com and look at the financial ratios of some big companies to get a feel for what they mean.