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Financial Statements: A Step-by-step Guide to Understanding and Creating Financial Reports

4.12  ·  Rating details ·  805 ratings  ·  46 reviews
Explains how to read the three basic types of financial statements--the balance sheet, the income statement, and the cash flow--and uses this foundation to explain the flow of cash and product.
Paperback, 223 pages
Published June 11th 1998 by Career Press (first published January 31st 1998)
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Average rating 4.12  · 
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Amir
Oct 14, 2012 rated it really liked it

It is not easy to write an accounting book. A lot of accounting books are written for accountants which might makes a lot of sense however a large business audience may be left behind.

Mr. Ittelson does a decent job of balancing the explanation of accounting principles and the details behind these principles without getting into too many minute details as happen in other accounting books.

In the book first section, Mr. Ittelson starts with explaining the 3 accounting statements, each with its own
...more
Alaeddin Hallak
I loved how it ties all basics you need to know about accounting, valuation, and capital budgeting into one concrete case study. I came out with a lot more confidence in understanding company's fundamentals through its financial statements, and this will help immensely in value investing.
Fengyang Song
Feb 28, 2017 rated it it was amazing
The best book I have read in explaining very clearly what each line item on the financial statements mean. For example, how do they link to one another, and most importantly, how do we interpret these numbers.

Reading this book back to front was a joy, and this speaks volumes on a traditional dry topic for most people.
Syen
Nov 11, 2017 rated it it was amazing
Shelves: economics
Finance, Biology and neuro sciences are the very definition of the dry subjects in my opinion. One cannot read a line or two on these subjects without stumbling upon some obscure jargon, making them quite inaccessible for the layman.
So when I picked up this book I was first dismayed by its volume as I thought that it was going to be those books which I pick but never finish.
But I was amazed, as the author took us on the journey to prepare all the three statements of a company from scratch. Pages
...more
Kulwinder Rajpal
Jan 25, 2018 rated it really liked it  ·  review of another edition
This is one of the best books out there to explain financial accounting in a simple manner. It covers all the basic concepts related to financial statements via a detailed introduction to the various terms and types of financial statements. Then it explains them with an example of a start up and a series of transactions that show how accounting changes with the changes in business. It also shows you how a financial statement could look like and what parameters are to be looked at while ...more
Peter S
Apr 10, 2019 rated it liked it
3 stars because its such a boring topic and it could have definitely been done better. However, this book is helpful in a few ways. I now have a clear understanding of..

1. The three financial statements. I understand what they say, how to read them, and the vocabulary that accompanies them.

Income Statement = profitability
Balance sheet = assets, liabilities, and equity
Cash flow statement = cash movements

2. Ratio Analysis

3. The major equations/mechanisms of modeling of finance, including NPV,
...more
Patrick
Feb 05, 2017 rated it really liked it  ·  review of another edition
This is a really good book for review. I am going back into a business degree and Its been several years since I have had accounting. This book acted as a great refresher and it is laid out in a very logical manner. I would say that you might wanted to consider the printed version vs the kindle version. Because of the layout of the book and the type of subject matter, it does not lend itself to be easy to read on the kindle.
Ben Donahower
May 01, 2019 rated it really liked it  ·  review of another edition
Useful book, limited examples

This was a useful book in understanding several forms and accounting. if I had a challenge it was that it followed a manufacturer, Appleseed partners, so the examples were all related to this business. For continuity sake that was great but it also left me wondering if there were examples in a service business would have been more relevant to me.
Rob Weir
Jul 10, 2018 rated it it was amazing
Shelves: investing, business
If you find yourself needing to have a conceptual understand of financial statements, what they tell, how they are put together, and how they can be interpreted, it is hard to go wrong with this engaging, approachable book.
shubham
Jun 02, 2019 rated it really liked it
This book will bring clearity about how the 3 financial statements are linked to each other. Use of easy language and example of a newly established company makes this an interesting read for non-accounting personnel..!!!
Dr. Cock'n Ballz
Fine book. Comprehensive and for beginners. What makes this book special is the author walks you through a few years operation of a business, and shows the statements along the way. Not a page turner... but useful. And a real good summary of broader business topics at the end.

I recommend it.
roundface
Apr 06, 2018 rated it it was amazing  ·  review of another edition
Great entry level book, very clear and easy to read.
Anmol Jindal
Nov 13, 2018 rated it really liked it  ·  review of another edition
A must read for anyone starting his own business and anyone even remotely interested in finance.
Madhavi Ravanan
Jan 17, 2019 rated it it was amazing
Cool and casual read. Takes away the fear of financial statements for good.
Alex Schedrov
Dec 09, 2019 rated it it was amazing
Great books to learn how to read financial statements and reports. It will walk you through the history of founding an apple sauce company and expanding to other markets from a financial perspective.
Himanshu
Mar 28, 2019 rated it it was amazing
If you want to learn Accounting, then look no further. This cracker of a book gives very good insight into basics of accounting. Highly recommended
Bùi Hà
Feb 20, 2019 rated it it was amazing
The best accounting book that I have read. I learn enough accounting knowledge by just 2 nights reading this book.
Andrei Savu
Nov 12, 2018 rated it it was amazing  ·  review of another edition
Good book to have around. Very helpful to understand how financial statements change in response to changes in the business.
Abdullah
Jan 17, 2019 rated it really liked it  ·  review of another edition
The book was helpful and easy to understand, and it connect the financial statements very will.
Anna
Feb 08, 2020 rated it it was amazing
I read 2009 edition (2020 is coming out in April). It reads almost like a story. It uses simple language making it very easy to grasp concepts.
Mark
May 22, 2018 rated it liked it  ·  review of another edition
Basic and simple to understand.
Stevewilliams27
Oct 10, 2017 rated it really liked it
well presented, easily digestible, but very much an intro
Dennie
Dec 27, 2019 rated it it was amazing  ·  review of another edition
Awesome book step by step explination
Jeffrey Sukijung
Jul 04, 2019 rated it really liked it
Best book on financial statements? Definitely no. But on the premise that the author wrote the book to help non financial manager to design and use financial statements in ther start up business, this is the best book I have found.
Mike Morgenstein
Mar 21, 2015 rated it it was amazing
Financial Statements by Thomas Ittelson is - as says on the front cover of the book - "a step-by-step guide to understanding and creating financial reports", and does just that brilliantly. The author manages to make rather difficult business concepts palpable to the laymen reader. The book is also well suited for those with a higher business acumen because the author attacks many financial statement and business fundamentals in a feasible way that serves as good reiteration and study. I feel ...more
Joseph
Feb 14, 2017 rated it liked it
Good primer on the construction and use of financial statements for the non-accountant. Starts with the basics of what composes the income statement, balance sheet, and cash flow statement, as well as their importance to a small business. Ends with a nice catalog of the malfeasance possible when these statements are ignored or doctored.
Jason Riemens
Dec 05, 2014 rated it it was amazing  ·  review of another edition
I truly believe that this is a fantastically helpful book. As the book suggests, if you are the non-financial type, this is a great book for you.

However, the book leaves out that - if you are advanced in finance and accounting and speak to normal human beings - then you need to read this book more. In most professions, what clearly happens is, as one progresses, people forget the basics or at least are unable to explain them in a clear and direct manner.

Likely, even more unfortunate is, that
...more
Jitendra Kumar
Jul 01, 2015 rated it it was amazing  ·  review of another edition
The author has done a stupendous job in explaining the so called scary financial figures for a common man with no background of finance. Its a must read for first time entrepreneur with no finance background to get a hang of the financial terminology and their real impacts on business.

May be the accounting professional wouldn't be so thrilled with this text but I would definitely say that for the layman(like me) attempt to understand financial statements, this book could be a first stepping
...more
Clement Ting
Sep 19, 2016 rated it it was amazing  ·  review of another edition
This is that 1 book I regret not knowing of when I first entered the world of numbers. It is detailed yet concise, and it is wonderfully written for non-accounting and non-finance readers. I especially liked the way Ittelson used a manufacturing company as an example for its readers to completely comprehend the movement of figures in the financial statements - how the figures move or changed between P&L, Cashflow and Balance Sheet. Although structured in baby steps, beginners will still need ...more
Charles Allan
Jan 15, 2013 rated it it was amazing
This has to be my favorite basic company financials book.

Using a hypothetical example of an apple sauce company, the authors take you step by step though a company's balance sheet, define terms like costs and expenses, show you the proper sequence of math you go through (like depreciation or sales), how different costs and earnings affect each other and where to enter each financial transaction.

Of course, you'll want to graduate to advanced financial statement books, but this is a great start.
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