Hi all,
Looking for the best book/course on financial statement analysis. Less of an investing book and more of a "hey this line item changed from x to y that probably signals z (and this is how it is relevant to the investment -- bonus pts for this)" type of book, if that makes sense. I have graduated with business undergrad and am familiar with accounting and DCF/3 statement modeling, however I work in MBS trading, so looking for a book to help with my equity knowledge and point out some accounting/financial statement concepts that go a bit beyond the basics.Thank you in advance and let me know if I can provide any clarification.
Bump
I read a book called How to Read Financial Statements, I looked just now on Amazon and there are several that capture the basic gist. No reason to believe whatever I grabbed off the shelf of the library 10 years ago was the best. A primer can be helpful for a beginner but you wouldn't know how to build a three statement model correctly if there is anything earth shattering in an intro book like that. You might be looking in the wrong place if you're looking for unique insight from individual accounts (forest / trees). If I'm trying to perform a valuation I need to understand the model, I can't forecast an account if I don't understand its balance. The FASB Accounting Standards Codification is the authority for the logic behind individual accounts and their balance. Use it like a dictionary.
Look up Warren Buffet and the Interpretation of Financial Statements
Basically describes what to look for in each line item.
As you already seem to have a fairly good understanding of accounting + financial statements, what I'd recommend is looking at books on historic cases of financial fraud and seeing if you can any find similar red flags in companies. Good books are: Financial Shenanigans, and The Signs Were There. The latter one has more of a UK/ smallcap focus, but it's still excellent. Every investment opportunity is different of course, but there are some warning signs to look out for, hope this helps.
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