I would do an oil change if you haven't already.
Get it running, be sure the thermostat is in and working, replace the plugs and do everything needed to make it run as it should. If the carb needs attention, get it right too.
Put some time on it under load if possible. Listen to the engine, watch the oil pressure, look for under load smoke, look at the crank case blow by. If it will idle smooth is a good sign. These things will really tell as much or more than the compression test.
Then set the valve lash.
Then do the compression test. Do it with a warm engine, dry first, then with a few squirts of oil in each cylinder. Spin the oil out before taking the reading. Be sure the battery is fully charged and capable of running the tests without breaking down, Cranking speed is important.
An engine with bad compression will show as poor idle, puffing out breather tube, and unequal compression readings.
An engine with bad oil rings will show as blue smoke under load, oil consumption, and plug fouling. It can have bad oil rings and still have good compression.
Blue smoke on start up is valve guides.
You can also tell a lot about an engine by the sludge build up. A sludged engine is not healthy. Sludge is a result of leaking compression rings. Severe sludge is a result of bad rings, poor maintenance, possibly running cold and/or under worked.
In rare cases, a sickly engine can be somewhat restored by correcting needed maintenance items, several oil changes using 15w 40 diesel oil, and properly working and loading the engine. If it's borderline, give this a try before jumping into it.