The Comprehensive Guide on How to Read a Financial Report

List of Exhibits ix Preface xv Part One--Financial Report Fundamentals 1 Financial Statement Basics: The Real Meat and Potatoes of Financial Reports 3 2 Starting with Cash Flows 13 3 Mastering the Balance Sheet 21 4 Understanding Profit 31 5 Profit Isn't Everything and All Things 43 Part Two--Working Capital Connections 6 Our Case Study--Company Introductions 55 7 Sales Revenue, Trade Accounts Receivable, and Deferred Revenue 65 8 Cost(s) of Goods Sold Expense and Inventory 77 9 Inventory and Accounts Payable 89 10 Operating Expenses and Accounts Payable 99 11 Accruing Liabilities for Incurred but Unpaid Expenses 109 12 Income Tax Expense--A Liability and Asset? 117 Part Three--Financial Capital Connections and Cash Flows 13 Our Case Study--Company Updates and Assessments 129 14 Long-Term Assets and Depreciation, Amortization, and Other Expenses 139 15 Long-Term Liabilities, Interest, and Other Expenses 151 16 Net Income, Retained Earnings, Equity, and Earnings per Share (EPS) 163 17 Cash Flow from Operating (Profi t-Making) Activities 173 18 Cash Flows from Investing and Financing Activities 183 Part Four--Financial Report Analysis 19 Expansion and Contraction Impacts on Cash Flow 195 20 What Is EBITDA and Why Is It Important? 211 21 Financial Statement Footnotes--The Devil's in the Details 217 22 Financial Statement Ratios--Calculating and Understanding 229 23 Profit Analysis for Business Managers 245 24 Our Case Study and the Moral of the Story--The Good, the Bad, and the Ugly 259 Part Five--Financial Report Truthfulness 25 Choosing Accounting Methods and Massaging the Numbers 273 26 Audits of Financial Reports 285 27 Small Business Financial Reporting 299 28 Basic Questions, Basic Answers, No BS 309 About the Authors 319 About the Companion Website 321 Index 323