The Interpretation of Financial Statements

Submitted by Book Library on 12 April, 2010 - 01:29

"All investors, from beginners to old hands, should gain from the use of this guide, as I have." From the Introduction by Michael F. Price, president, Franklin Mutual Advisors, Inc. Benjamin Graham has been called the most important investment thinker of the twentieth century. As a master investor, pioneering stock analyst, and mentor to investment superstars, he has no peer.

The volume you hold in your hands is Graham's timeless guide to interpreting and understanding financial statements. It has long been out of print, but now joins Graham's other masterpieces, The Intelligent Investor and Security Analysis, as the three priceless keys to understanding Graham and value investing. The advice he offers in this book is as useful and prescient today as it was sixty years ago. As he writes in the preface, "if you have precise information as to a company's present financial position and its past earnings record, you are better equipped to gauge its future possibilities. And this is the essential function and value of security analysis."

Written just three years after his landmark Security Analysis,The Interpretation of Financial Statements gets to the heart of the master's ideas on value investing in astonishingly few pages. Readers will learn to analyze a company's balance sheets and income statements and arrive at a true understanding of its financial position and earnings record. Graham provides simple tests any reader can apply to determine the financial health and well-being of any company.

This volume is an exact text replica of the first edition of this book published by Harper & Brothers in 1937. Graham's original language has been restored, and readers can be assured that every idea and technique presented here appears exactly as Graham intended. Highly practical and accessible, it is an essential guide for all business people--and makes the perfect companion volume to Graham's investment masterpiece The Intelligent Investor.

Positive Review Of Book

This is a very short book on how to analyze financial statements. It is written in simple English that most people can understand. Because it was written in the `30s, it should not be the only book that investors read on financial statements, but it should definitely be one of many. Warren Buffett learned a lot from Benjamin Graham and so can you.

Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market.

Negative Review Of Book

The book's content doesn't give any valuable information at all. What's inside can be found on most other financial and investment books. Furthermore, the cost is way way too high. I feel ripped off! My worst buy at the moment!!

Author Biography

Benjamin Graham, the father of value investing, was perhaps the most influential investment figure of all time.His work laid the foundation of modern security analysis, and two of his books,The Intelligent Investor (1949) and Security Analysis(1934), are investment classics that remain bestsellers to this day.His Life and work have been inspiration for many of today's most successful investors, including Warren Buffett, Michael F. Price, and John Neff.

Table of Contents

  • PART I. BALANCE SHEETS AND INCOME ACCOUNTS PREFACE
    1. BALANCE SHEETS IN GENERAL
    2. DEBITS AND CREDITS
    3. TOTAL ASSETS AND TOTAL LIABILITIES
    4. CAPITAL AND SURPLUS
    5. PROPERTY ACCOUNT
    6. DEPRECIATION AND DEPLETION
    7. NON-CURRENT INVESTMENTS
    8. INTANGIBLE ASSETS
    9. PREPAID EXPENSES
    10. DEFERRED CHARGES
    11. CURRENT ASSETS
    12. CURRENT LIABILITIES
    13. WORKING CAPITAL
    14. CURRENT RATIO
    15. INVENTORIES
    16. RECEIVABLES
    17. CASH
    18. NOTES PAYABLE
    19. RESERVES
    20. BOOK VALUE OR EQUITY
    21. CALCULATING BOOK VALUE
    22. BOOK VALUE OF BONDS AND STOCKS
    23. OTHER ITEMS IN BOOK VALUE
    24. LIQUIDATING VALUE AND NET CURRENT Asset Value
    25. EARNING POWER
    26. A TYPICAL PUBLIC UTILITY INCOME ACCOUNT
    27. A TYPICAL INDUSTRIAL INCOME ACCOUNT
    28. A TYPICAL RAILROAD INCOME ACCOUNT
    29. CALCULATING EARNINGS
    30. THE MAINTENANCE AND DEPRECIATION FACTOR
    31. THE SAFETY OF INTEREST AND PREFERRED DiVIDENDS
    32. TRENDS
    33. COMMON STOCK PRICES AND VALUES
    34. CONCLUSION
  • PART II. ANALYZING A BALANCE SHEET AND INCOME ACCOUNT BY THE RATIO METHOD
  • PART III. DEFINITIONS OF FINANCIAL TERMS AND PHRASES

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