Reading financial statements

Hey monkeys,

as the title suggests i'm looking for resources to tap into to learn how to better read financial statements (I/S, B/S, C/F etc).

Would it be a better idea to go through these statements and google/investopedia the terms I don't know or is there a good book out there that is comprehensive (and mind-numbingly boring) in knowledge on different accounting standards and etc

I realize its probably best to just sift through a lot of financial statements on 10-k's but I'd want to get a good part of the fundamentals down (I'm no novice)

Thanks

soules9219

Best Response

when i was in college, i read this book on my free time:

http://www.amazon.com/Financial-Intelligence-Managers-Knowing-Numbers/d…

Financial Intelligence is way better and far more easy to digest than anything you'll pick up in an accounting or corporate finance class. the book goes through the major line items of each statement, how to derive key ratios, and where exactly the line between the art and science in accounting is blurred.

once you get this book down (less than 200 pages, you'll finish it within a week), you'll feel way more confident and comfortable sifting through a 10-k or 10-q. let's just say this book got me off in the right track for a career in finance.

cheers.

Capitalist
 

There are many ways. My personal favourite book is "How to read a financial statement" by John Tracy. For someone as dumb as me, its helpful to show how everything is linked so I can understand how everything flows and detect my mistakes quickly. There's also a free PDF by Merril Lynch: http://www.lib.uwo.ca/files/business/howtoreadfinreport.pdf on reading financial statements. Or you can pick up the CFA level 1 accounting book and read it(it'll give you all the info you'll need to read/understand statements).

You can read all the books in the world but without practice it won't mean anything. I suggest 2 things to really get good. 1) go to edgar and read as many statements as you can. Do not skip any line without understanding(google is your friend here).
2) try to learn how to model or create your own statements, this will allow you to be directly engaged and make learning faster/easier and more fun.

 

Book #2 of the CFA curriculum - It pulls together a lot of different textbooks to make one "pretty good" one. Level I is good if you haven't had an UG FSA/Reporting course, and Level II goes in to WAY more depth than you'll likely cover in UG. You can find both on Ebay, or possibly in ebook format if you search around enough.

 
 

London, you're a perfect example of how targets don't always produce the best of the bunch. You're clearly inferior to 99% of the people on this board, yet you somehow managed to land at an Ivy and then land an SA at a BB. Good thing you'll just be a fill-in over the summer until they realize you don't belong. You're destined for a career in BO operations.

 

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