What do you think?
Rate this book
Understanding Financial Statements
This accessible book presents conceptual background and analysis tools for understanding and interpreting financial statements while emphasizing financial statement evaluation and using them for business decision-making.This book helps readers think and reason through complex, real-world situations while emphasizing solutions for unstructured problems, using accounting information for decision-making. Devoting individual chapters to different financial statements, it communicates complex financial accounting and disclosure issues in precise language, avoiding unnecessary detail. Presents the financial statements (annual reports) of actual companies. Incorporates new requirements and changes in accounting and reporting standards. The fifth edition of Understanding Financial Statements has been updated to include new requirements and changes in accounting reporting and standards as well as proposed changes that may affect financial reporting in the future. Provides additional cases which allow readers to explore practical and realistic applications of concepts and analytical tools throughout the book.
288 pages, Paperback
First published February 1, 1988
15 people are currently reading
177 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 8 of 8 reviews
December 13, 2022
Good resource on corporate financial statements for the novice or one who needs a quick refresher. The book includes many case studies, exercises, and little tests. While I didn’t complete the tests, it would be helpful to those who are just now looking at these financial issues.
This book is both simple and complex. The authors highlight that auditors are hired by the firm therefore may be cautious at how they raise issues. The book also reviews all the complications of reviewing the health of a company, and all the discretionary issues that could make the balance sheet look better than reality. The authors review the various ways depreciation can be figured – with the pros and cons of each.
Many areas mentioned in the report are common sense and sometimes complicated such as FIFO – first in, first out -- and LIFO – last in, first out versus last in. The authors explain why this impacts the bottom line. The most important area of the book was the section reviewing how to analyze financial statements. This chapter shared the various perspectives of using a review – from the creditor, the investor, or from management. Sources included the auditor’s report, management discussion and analysis, supplementary schedules, the SEC forms 10-K and 10-Q (including material litigation and government actions), and various widely used databases such as Dun and Bradstreet and Standard and Poor.
The book concluded with a summary of financial ratios and glossary of financial terms.
This book is both simple and complex. The authors highlight that auditors are hired by the firm therefore may be cautious at how they raise issues. The book also reviews all the complications of reviewing the health of a company, and all the discretionary issues that could make the balance sheet look better than reality. The authors review the various ways depreciation can be figured – with the pros and cons of each.
Many areas mentioned in the report are common sense and sometimes complicated such as FIFO – first in, first out -- and LIFO – last in, first out versus last in. The authors explain why this impacts the bottom line. The most important area of the book was the section reviewing how to analyze financial statements. This chapter shared the various perspectives of using a review – from the creditor, the investor, or from management. Sources included the auditor’s report, management discussion and analysis, supplementary schedules, the SEC forms 10-K and 10-Q (including material litigation and government actions), and various widely used databases such as Dun and Bradstreet and Standard and Poor.
The book concluded with a summary of financial ratios and glossary of financial terms.
October 8, 2018
I had to read this for a designation I'm working on. The first three chapters were fundamental, the 4th chapter on cash flows I found super confusing and the final chapter on ratios wasn't bad. Considering the material it could have been worse but I did have to seek out supplemental material because I still don't feel that I have a solid grasp of the subject matter. I'm so glad I am done with this!
December 11, 2020
It’s a good book but
It’s a good book for people that need to understand a financial statement. It’s a basic book not intermediate. I’m going to have to go over the cash flow statement section of the book. in my opinion the author doesn’t do a good job in explaining how it works! There’s to much explanation! A lot of reading for a concept that can be explained very simply but the authors fail to do that!
It’s a good book for people that need to understand a financial statement. It’s a basic book not intermediate. I’m going to have to go over the cash flow statement section of the book. in my opinion the author doesn’t do a good job in explaining how it works! There’s to much explanation! A lot of reading for a concept that can be explained very simply but the authors fail to do that!
Want to read
June 19, 2024Recommended after taking the CLP course Financial Intelligence
November 19, 2015
This is a great resource for anyone in the business world as either background knowledge or for an investor, manager/leader, or creditor. For the most part, the text was easy to read and understand, but there were a few areas that were confusing. For future editions, it would be great to have a summary of Chapter 5's financial analysis ratios at the end of the chapter or in an appendix. This summary should contain what the ratio is, what it means, how the calculation is labeled, and whether a low or high value is preferred or not preferred.
February 22, 2008
Oh my gosh, I hate to admit it, but numbers are just NOT my strong suit!
July 8, 2008
A good introduction to reading financial statements. It is not too heavy or technical.
January 8, 2009
This is the best place to start if you're interested in investment analysis. If you understand this book then you can jump right to "How to Value any Asset" or the McKinsey & Co. book on valuation.
Displaying 1 - 8 of 8 reviews