Your personal roadmap to becoming fluent in financial reports

At first glance, the data in financial reports might seem confusing or overwhelming. But, with the right guide at your side, you can learn to translate even the thickest and most complex financial reports into plain English.

In Reading Financial Reports For Dummies, you'll move step-by-step through each phase of interpreting and understanding the data in a financial report, learning the key accounting and business fundamentals as you go. The book includes clear explanations of basic and advanced topics in finance, from the difference between private and public companies to cash flow analysis.

In this book, you'll also find:

• Full coverage of how to analyze annual reports, including their balance sheets, income statements, statements of cash flow, and consolidated statements
• Real-world case studies and financial statement examples from companies like Mattel and Hasbro

• Strategies for analyzing financial reports to reveal opportunities for operations optimization

  Reading Financial Reports For Dummies is a can't-miss resource for early-career investors, traders, brokers, and business leaders looking to improve their financial literacy with a reliable, accurate, and easy-to-follow financial handbook.

  Autorentext

  *Lita Epstein, MBA is a financial writer who focuses on career growth and business topics. She earned her MBA from Emory University and her BA from Rutgers University. Lita has written more than 40 books, including the previous editions of Reading Financial Reports For Dummies*.

  Klappentext

  Your personal roadmap to becoming fluent in financial reports At first glance, the data in financial reports might seem confusing or overwhelming. But, with the right guide at your side, you can learn to translate even the thickest and most complex financial reports into plain English. In Reading Financial Reports For Dummies, you'll move step-by-step through each phase of interpreting and understanding the data in a financial report, learning the key accounting and business fundamentals as you go. The book includes clear explanations of basic and advanced topics in finance, from the difference between private and public companies to cash flow analysis. In this book, you'll also find: Full coverage of how to analyze annual reports, including their balance sheets, income statements, statements of cash flow, and consolidated statements Real-world case studies and financial statement examples from companies like Mattel and Hasbro * Strategies for analyzing financial reports to reveal opportunities for operations optimization Reading Financial Reports For Dummies is a can't-miss resource for early-career investors, traders, brokers, and business leaders looking to improve their financial literacy with a reliable, accurate, and easy-to-follow financial handbook.

  Inhalt

  Introduction 1

  About This Book 2

  Conventions Used in This Book 2

  What You're Not to Read 2

  Foolish Assumptions 3

  Icons Used in This Book 3

  Beyond the Book 4

  Where to Go from Here 4

  Part 1: Getting Started with Financial Reports 5

  Chapter 1: Opening the Cornucopia of Reports 7

  Figuring Out Financial Reporting 8

  Preparing the reports 8

  Seeing why financial reporting counts (and who's counting) 9

  Checking Out Types of Reporting 11

  Keeping everyone informed 11

  Following the rules: Government requirements 12

  Going global 13

  Staying within the walls of the company: Internal reporting 14

  Dissecting the Annual Report to Shareholders 15

  Breaking down the parts 15

  Getting to the meat of the matter 16

  Keeping the number crunchers in line 17

  Chapter 2: Recognizing Business Types and Their Tax Rules 19

  Flying Solo: Sole Proprietorships 20

  Keeping taxes personal 20

  Reviewing requirements for reporting 21

  Joining Forces: Partnerships 21

  Partnering up on taxes 22

  Meeting reporting requirements 22

  Seeking Protection with Limited Liability Companies 22

  Taking stock of taxes 23

  Reviewing reporting requirements 23

  Shielding Your Assets: S and C Corporations 23

  Paying taxes the corporate way 24

  Getting familiar with reporting requirements 25

  Chapter 3: Public or Private: How Company Structure Affects the Books 27

  Investigating Private Companies 28

  Checking out the benefits 29

  Defining disadvantages 30

  Figuring out reporting 31

  Understanding Public Companies 32

  Examining the perks 33

  Looking at the negative side 34

  Filing and More Filing: Government and Shareholder Reports 35

  Quarterly reports 35

  Yearly report 35

  The rules of the Sarbanes-Oxley Act 36

  Dodd-Frank's impact on financial industry regulation 39

  Entering a Whole New World: How a Company Goes from

  Private to Public 41

  Teaming up with an investment banker 41

  Making a public offering 42

  Chapter 4: Digging into Accounting Basics 45

  Making Sense of Accounting Methods 45

  Cash-basis accounting 46

  Accrual accounting 46

  Why method matters 46

  Understanding Debits and Credits 48

  Double-entry accounting 49

  Profit and loss statements 50

  The effect of debits and credits on sales 50

  Depreciation and amortization 51

  Checking Out the Chart of Accounts 52

  Asset accounts 54

  Liability accounts 56

  Equity accounts 57

  Revenue accounts 58

  Expense accounts 59

  Differentiating Profit Types 60

  Gross profit 60

  Operating profit 60

  Net profit 61

  Part 2: The Big Show: Annual Reports 63

  Chapter 5: Exploring the Anatomy of an Annual Report 65

  Everything but the Numbers 66

  Debunking the letter to shareholders 66

  Making sense of the corporate message 67

  Meeting the people in charge 68

  Finding basic shareholder information 68

  Getting the skinny from management 68

  Getting guarantees from management 72

  Bringing the auditors' answers to light 73

  Presenting the Financial Picture 76

  Summarizing the Financial Data 77

  Finding the highlights 77

  Reading the notes 78

  Chapter 6: Balancing Assets against Liabilities and Equity 79

  Understanding the Balance Equation 80

  Introducing the Balance Sheet 80

  Digging into dates 80

  Nailing down the numbers 81

  Figuring out format 82

  Ogling Assets 84

  Current assets 84

  Long-term assets 88

  Accumulated depreciation 90

  Looking at Liabilities 91

  Current liabilities 91

  Long-term liabilities 92

  Navigating the Equity Maze 93

  Stock 93

  Retained earnings 94

  Capital 94

  Drawing 94

  Chapter 7: Using the Income Statement 95

  Introducing the Income Statement 96

  Digging into dates 97

  Figuring out format 97

  Delving into the Tricky Business of Revenues 100

  Defining revenue 100

  Adjusting sales 101

  Considering cost of goods sold 103

  Gauging gross profit 104

  Acknowledging Expenses 105

  Sorting Out the Profit and Loss Types 107

  EBITDA 107

  Nonoperating income or expense 108

  Net profit or loss 109

  Calculating Earnings per Share 109

  Chapter 8: The Statement of Cash Flows 111

  Digging into the Statement of Cash Flows 112

  The parts 112

  The formats 113

  Checking Out Operating Activities 115

  Depreciation 116

  Inventory 116

  Accounts receivable 116

  Accounts payable 117

  The cash flow from activities section, summed up 117

  Investigating Investing Activities 118

  Understanding Financing Activities 119

  Issuing stock 119

  Buying back stock 119

  Paying dividends 120

  Incurring new debt 120

  Paying off debt 121

  Recognizing the Special Line Items 121

  Discontinued operations 121

  Foreign currency exchange 122

  Adding It All Up 122

  Chapter 9: Scouring the Notes to the Financial Statements 123

  Deciphering the Small Print 124

  Accounting Policies Note: Laying out the Rules of the Road 125

  Depreciation 126

  Revenue 126

  Expenses 127

  Figuring out Financial Borrowings and Other Commitments 128

  …