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Epstein - Reading Financial Reports For Dummies

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Reading Financial Reports For Dummies: summary, description and annotation

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Part I: getting down to financial reporting basics -- Opening the cornucopia of reports -- Recognizing different business types -- How company structure affects the books -- Digging into accounting basics -- Part II: checking out the big show: annual reports -- Exploring the anatomy of an annual report -- Balancing assets against liabilities and equity -- Using the income statement -- The statement of cash flows -- Scouring the notes to the financial statements -- Considering consolidated financial statements -- Part III: analyzing the numbers -- Testing the profits and market value -- Looking at liquidity -- Making sure the company has cash to carry on -- Part IV: understanding how companies optimize operations -- Using basic budgeting -- Turning up clues in turnover and assets -- Examining cash inflow and outflow -- How companies keep the cash flowing -- Part V: the many ways companies answer to others -- Finding out how companies find errors: the auditing process -- Digging into government regulations -- Checking out the analyst-corporation connection -- How companies soothe the shareholders -- Keeping score when companies play games with numbers -- Part VI: the part of tens -- Ten financial scandals that rocked the world -- Ten signs that a companys in trouble -- Ten top-notch online resources.

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Reading Financial Reports For Dummies by Lita Epstein Reading Financial - photo 1
Reading Financial Reports For Dummies

by Lita Epstein

Reading Financial Reports For Dummies Published by Wiley Publishing Inc - photo 2

Reading Financial Reports For Dummies

Published by
Wiley Publishing, Inc.
111 River St.
Hoboken, NJ 07030-5774
www.wiley.com

Copyright 2005 by Wiley Publishing, Inc., Indianapolis, Indiana

Published by Wiley Publishing, Inc., Indianapolis, Indiana

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, e-mail: brandreview@wiley.com .

Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book.

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional person should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read.

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Library of Congress Control Number: 2004116012

ISBN: 0-7645-7733-6

Manufactured in the United States of America

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About the Author

Lita Epstein ran the financial accounting lab when she worked as a teaching assistant as she completed her MBA program at Emory Universitys Goizueta Business School. After receiving her MBA, she managed finances for a small non-profit organization and the facilities management section of a large medical clinic.

Now she enjoys helping people develop good financial, investing, and tax planning skills. She designs and teaches online courses on topics such as investing for retirement, getting ready for tax time, and finance and investing for women. She is the author of Streetwise Crash Course MBA and Streetwise Retirement Planning (Adams Media Corporation). Lita is the co-author of Trading For Dummies (Wiley) and Teach Yourself Retirement Planning in 24 Hours (Penguin Putnam).

Lita was the content director for a financial services Web site, MostChoice. com and managed the Web site Investing for Women. She also wrote TipWorlds Mutual Fund Tip of the Day in addition to columns about mutual fund trends for numerous Web sites. As a Congressional press secretary, Lita gained firsthand knowledge about how to work within and around the federal bureaucracy, which gives her great insight into how government programs work. In the past, Lita has been a daily newspaper reporter, a magazine editor, and an associate director for development at The Carter Center.

For fun, Lita enjoys scuba diving and is certified as an underwater photographer. She hikes, canoes, and enjoys surfing the Web to find its hidden treasures.

Dedication

To my father, Jerome Kirschbrown, an auditor and savings and loan examiner, who helped to hone my financial skills and taught me to be leery of what I see in financial reports.

Authors Acknowledgments

I would like to thank all the people who helped to make this book possible at Wiley, especially my acquisitions editor, Stacy Kennedy, who first discussed this topic with me; my project editor, Traci Cumbay, who did a wonderful job of steering this book through the entire process and was always available to help me with any problems; and my copy editors Michelle Dzurny and Trisha Strietelmeier for their excellent work cleaning up the copy.

I also want to thank my agent Jessica Faust, who finds all these great projects for me, and my outstanding technical editor, Shellie Moore, who helped keep all the technical accounting stuff accurate for this book. This is third time weve worked together on a book. And a special thank you to H.G. Wolpin who puts up with all my craziness as I rush to meet deadlines.

Publishers Acknowledgments

Were proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/.

Some of the people who helped bring this book to market include the following:

Acquisitions, Editorial, and Media Development

Project Editor: Traci Cumbay

Acquisitions Editor: Stacy Kennedy

Copy Editors: Michelle Dzurny, Trisha Strietelmeier

Technical Editor: Shellie Moore

Senior Permissions Editor: Carmen Krikorian

Editorial Manager: Jennifer Ehrlich

Editorial Assistants: Courtney Allen, Nadine Bell, Melissa Bennett

Cover Photo: Bernhardt Fudyma Design Group, Concept and Design

Cartoons: Rich Tennant, www.the5thwave.com

Composition

Project Coordinator: Adrienne Martinez

Layout and Graphics: Jonelle Burns, Andrea Dahl, Joyce Haughey, Stephanie D. Jumper, Barry Offringa, Jacque Roth, Heather Ryan

Proofreaders: Carl W. Pierce, TECHBOOKS Production Services

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