How to Read a Financial Report, Eighth Edition: Wringing Vital Signs Out of the Numbers

Financial reports provide vital information to investors, lenders, and managers. Yet, the financial statements in a financial report seem to be written in a foreign language that only accountants can understand. This new Eighth Edition of How to Read a Financial Report breaks through that language barrier, clears away the fog, and offers a plain-English user's guide to financial reports. This updated edition features new information on the move toward separate financial and accounting reporting standards for private companies, the emergence of websites offering financial information, pending changes in the auditor's report language and what this means to investors, and requirements for XBRL tagging in reporting to the SEC, among other topics.

• Makes it easy to understand what financial reports really say
• Updated to include the latest information financial reporting standards and regulatory changes
• Written by an author team with a combined 50-plus years of experience in financial accounting

With this new edition of How to Read a Financial Report, investors will find everything they need to fully understand the profit, cash flow, and financial condition of any business.

Preface to the Eighth Edition

Part I: Fundamentals

Chapter 1: Starting With Cash Flows

Chapter 2: Three Financial Statements

Chapter 3:  Profit Accounting

Chapter 4: Profit Isn’t Everything

Part II: Connections

Chapter 5: Sales Revenue and Accounts Receivable

Chapter 6: Cost of Goods Sold Expense and Inventory

Chapter 7: Inventory and Accounts Payable

Chapter 8: Operating Expenses and Accounts Payable

Chapter 9: Operating Expenses and Prepaid Expenses

Chapter 10: Depreciation Expense and Property, Plant and Equipment; Intangible Assets

Chapter 11: Accruing the Liability for Unpaid Expenses

Chapter 12: Income Tax Expense and its Liability

Chapter 13: Net Income and Retained Earnings; Earnings per Share (EPS)

Part III:  Cash Flow

Chapter 14: Cash Flow from Operating (Profit-Making) Activities

Chapter 15: Cash Flows From Investing and Financing Activities

Chapter 16: Growth and Decline Impacts on Cash Flow

Part IV:  Analysis

Chapter 17: Footnotes To Financial Statements

Chapter 18: Financial Statement Ratios

Chapter 19: Profit Analysis for Business Managers

Part V:  Truthfulness

Chapter 20: Choosing Accounting Methods and Massaging the Numbers

Chapter 21: Audits of Financial Reports

Chapter 22: Basic Questions; Basic Answers

Chapter 23: Small Business Financial Reporting

Index