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

Learn how to read, understand, analyze, and interpret different types of financial reports In the newly revised and updated 10th Edition of How to Read a Financial Report, seasoned accounting, financial, and business consultant Tage C. Tracy guides readers through reading, understanding, analyzing, and interpreting various types of financial reports, including cash flow, financial condition, and profit performance reports. This book also reveals the various connections between different financial metrics, reports, and statements, discusses changes in accounting and finance reporting rules, current practices, and recent trends, and explains how financial information can be manipulated, such as through inclusion or omission of certain KPIs. This bestselling guide uses jargon-simplified and easy-to-understand language to make the information accessible to all, regardless of finance or accounting background. Updates to the 10th Edition include: Relevant terminology and issues critical to understand in today's economic environment. New material on loans, debt, and using financial reports and statements to understand performance. The connection of capital including debt and equity to the income statements and cash flow statements. Expanded financial analysis tools and ratios that provide a deeper understanding of a company's financial performance and strength. A more in-depth overview of how company's may engineer financial results and how understanding cash flows can help root out fraud. An essential all-in-one guide on the art of reading a financial report and avoiding common pitfalls and misconceptions, How to Read a Financial Report earns a well deserved spot on the bookshelves of all business leaders and investors who want to be able to read and understand financial reports and statements like a professional.

Table of Contents:
List of Exhibits vii Preface to the Tenth Edition ix Part One—Fundamentals 1 1 Arming You with Essential Knowledge 3 2 Starting with Cash Flows 13 3 Bedrock Financial Statement #1: The Income Statement 23 4 Bedrock Financial Statement #2: The Balance Sheet 31 5 Reporting Cash Flows 39 Part Two— Connections 49 6 Fitting Together Financial Statements 51 7 Sales Revenue and Accounts Receivable 59 8 Cost of Sales Revenue, Inventory, and Accounts Payable 65 9 Operating Expenses and Prepaid Expenses 77 10 Depreciation and Amortization Expense, and Fixed and Other Long- Term Assets 83 11 Operating Expenses and Accounts Payable 95 12 Accruing Liability for Unpaid Expenses 101 13 Income Tax Expense and Its Liability 107 14 Interest Expense, Accrued Liabilities, and Loans Payable 113 15 Net Income, Retained Earnings, and Earnings per Share (EPS) 123 16 Connecting the Cash Flow Dots 129 Part Three— Using and Analyzing Financial Statements 145 17 Footnotes and Management Discussions 147 18 Financial Statement Ratios and Analysis: Strength 159 19 Financial Statement Ratios and Analysis: Performance 173 20 Financial Engineering 187 21 Financial Fraud, aka Cooking the Books 199 22 CPAs and Financial Reports 211 23 Basic Questions, Basic Answers 219 About the Author 235 Index 237

About the Author :
Over the past 30+ years, Tage C. Tracy has operated a financial consulting firm focused on offering CFO/executive-level support and planning services to private companies on a fractional basis, working primarily with startups, rapid growth companies, strategic exits and acquisitions, and turnarounds and challenged environments.