Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports

by Thomas Ittelson

Simply the clearest and most comprehensive introduction to financial reporting available. No accounting background is required.

“Finally, a handbook that takes the mystery out of accounting principles.” —Margi Gandolfi, VP Marketing/Strategic Planning of New York Blood Center

This edition replaces all previous editions of this bestselling title based on the revised and expanded edition corrected and back to the basics.

Financial Statements is a perfect introduction to financial accounting for non-financial managers, investors, business students, lawyers, lenders, entrepreneurs, and more. Financial Statements deftly shows that all this accounting and financial-reporting stuff is not rocket science and that anyone can understand it!

Ittelson empowers non-financial managers by clearly and simply demonstrating how the balance sheet, income statement, and cash flow statement work together to offer a snapshot of any company’s financial health. Every term is defined in simple, understandable language. Every concept is explained with a basic, straightforward transaction example. And with the book’s uniquely visual approach, you’ll be able to see exactly how each transaction affects the three key financial statements of the enterprise. Each statement paints a different and essential picture—the “three-legged stool” of company

• The income statement shows the manufacturing (or service offerings) and selling actions of the company that result in profit or loss during a period. It gives a very important perspective on the company’s performance, its profitability.

• The cash flow statement details cash into and out of the company for a period. You need money to make money. Running out of cash is bad. Duh.

• The balance sheet records at the end of a period, an instant in time, what the company owns and what it owes, including the owners’ stake, called shareholders’ equity.
 

Genres: Finance, Business

273 pages, Kindle Edition

Published September 12, 2022

Reviews

[Abbie Linxwiler]

I didn’t necessarily read the entire book, as only parts were used for my class. However, this textbook beats any finance textbook I used in undergrad. I actually enjoyed reading this one, and the explanations/charts were much easier to understand.

[Madhur Bhargava · Rating 5 out of 5]

When art critics get together they talk about Form, Structure, and Meaning. When artists get together they talk about where you can buy cheap turpentine. – Picasso.
The Buffets and the Mungers in all of their talks love discussing turpentine, while the audience like me is clueless regarding form, structure, and meaning itself. This book is just that, it provides an insight into the Form, Structure, and meaning of a business, i.e., the balance sheet, income statement, and cash flow, to the naive/novice audience. Would heavily recommend reading this book before you go ahead and read one of those much-recommended books(eg - one up on Wall Street, the intelligent investor) by the finance gurus. The author understands the audience well and has written in a lucid manner, rich with practical examples that are simple enough for the novice reader.

[António Louro · Rating 5 out of 5]

Top book. It provides an introduction to key financial information using a case study approach.

As we follow the creation of the AppleSeed company and it's story, from a newly born company who requires debt and early investors to bloom, towards the IPO phase and its expansion of operations and acquisition of other businesses - the detailed step-by-step description and overview of its Financial Statements make what could've been a really boring and heavy accounting book, to a must-have for anyone thinking about being introduced to these types of financial concepts.

[Timon Ruban · Rating 2 out of 5]

I had picked up some accounting jargon left and right while reading other books, but was starting to get a little anxiety – "Is there very basic stuff that an economics major would know that I don't?" - and picked up this book.

For my taste, it was a little too slow and too basic (going as far as explaining how exponents work 🙈). The first part about the dance between the three financial statements with real world examples was fun, but the latter part (about strategy and making investment decisions) seemed very superficial and unhelpful ("you shall use a decision tree").

[Nitya · Rating 3 out of 5]

I did not read the entire thing but I read all of the parts which were relevant to what I need to learn, and it ended up being most of the book anyways. It was super digestible and helpful. I feel like people rarely read to learn about a topic nowadays (outside of school papers), I can’t remember the last time I did and I definitely would not have if not for my Dad.

[Christian Nelson · Rating 5 out of 5]

Small business owners Read

Reading and Interpreting financial Statements doesn't excite most small to mid sized business owners or managers but it's a necessity to grow and also help get you through lean times.

[Heather · Rating 5 out of 5]

Riveting. But really though, I bought this to help me understand financial statements better for my job. This book helped me learn about them in a way that brought in real life examples and made it interesting.

[Bratimir · Rating 5 out of 5]

Understanding your business

This book is an excellent starting point for getting your feet wet in understanding financial accounting. Learning through an example.

[Feliciu · Rating 5 out of 5]

Good book for begginers

A very good book for beginners in investing and accounting.
Very detailed book, well explaning and with a very practical example

[Dan Dawson · Rating 1 out of 5]

Just use WSP

[Cesar Ramirez · Rating 5 out of 5]

Easy way to understand financial statements. The capstone case presented in detail in the book is great