Ananda - FUNdamentals of Financial Statements: Its easier than you think

This book has been developed, refined by its stories and practical approaches and tested through public seminars. This book has well and truly passed the ultimate test of usefulness!

Dr. Marcus Powe,

Entrepreneur in Residence, RMIT University

Awarded Australias Best Entrepreneurial Educator in 2008

As the base line carries Its easier than you think! surely enables entrepreneurs to easily grasp not only the basics of Financial Statements but also the basics of running and managing a business enterprise. This is a commendable endeavour of Chinmay in bringing out a book so passionately on finance, as he loves to say by a non-finance person for non-finance people.

Dr.Madhura Chatrapathy

Director of Asian Centre for Entrepreneurial Initiatives

As a business coach and working with so many business owners, it has become crystal clear that there is a distinct lack of understanding around reading financials. I often say that the financials tell you exactly whats working and where the business needs to focus, the challenge is in being able to read them.

In his book, Chinmay has simplified the concepts and eliminated the jargon to allow even the most financially illiterate business owner to both understand and use their financial statements to control and grow their business.

David Guest

CEO and Head Coach, Outcomes Business Group

I started teaching Accounting in 1973 and have read more accounting texts than I care to remember. There is something in Chinmays book for all, from the business novice to the seasoned professional, with illustrations and examples that many will relate to.

I also believe that all bookkeepers and accountants should read this book to gain a deeper appreciation of how we should present financial information to our clients. It is a must read for everyone in business.

John Birse

Former Director, The Institute of Certified Bookkeepers Australia

FUNDAMENTALS OF FINANCIAL STATEMENTS

ITS EASIER THAN YOU THINK

CHINMAY ANANDA

Published by Finance Academy Australia, 2/11, Yarram Crescent, Clayton, Victoria 3168, Australia

In collaboration with, Zaang Entertainment Pvt Ltd

#48, St Johns road, Bangalore 560042, India

www.zaang.org

This publication is designed to provide accurate and authoritative information about the subject matter. However, it is sold with the understanding that the publisher or the author is not engaged in providing legal, accounting, or other professional services. If you require legal, accounting, tax, or other professional services, you should seek the services of a competent professional.

ISBN: 978-1530357994

Copyright 2015 by Chinmay Ananda

All rights reserved. This book or any portion thereof
may not be reproduced or used in any manner whatsoever
without the express written permission of the publisher or author
except for the use of brief quotations in a book review.

This book is not intended as a substitute for accounting advice from professional accountants. The reader should consult a qualified accountant or other professionals in matters relating to his/her finances.

Limits of Liability/Disclaimer of Warranty: Although the author and publisher have made every effort to ensure that the information in this book was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

Dedication

I dedicate this book to everyone who thinks finance is beyond their scope of understanding and are making business decisions based on assumption instead of facts.

Complexity is your enemy.

Any fool can make something complicated.

It is hard to make something simple.

Sir Richard Branson

FOREWORD

For over 30 years, I have been involved in teaching, researching, writing and participating in all things entrepreneurial. I have been driven by curiosity, energy and above all trying to understand.

To understand is simply to help identify the doors of opportunity as the first step. The second step is to find the right key to the right door.

When I first met Chinmay Ananda, he was searching, driven by his curiosity about why so many of us cannot understand the power of finance and unable to speak its language. To me, finance is the language of business whether it is for profit or not. If you cannot speak finance you cannot create, grow and leave a legacy of success. I have found that many of us who aspire to create and grow organisations are frustrated by not understanding finance.

What it means, how it works and how it can be used.

There is a constant request by bankers, investors, boards and the government for financial literacy, for the smarter use of funds and to really understand the consequences of getting the numbers wrong.

This book has been developed, refined by its stories and practical approaches and tested through public seminars. This book has well and truly passed the ultimate test of usefulness.

When you read this book, please reflect on your current thinking about finance and consider the straight-forward and practical approaches in the book and then you will understand.

I will be able to recognise those who are successful simply by seeing they understand finance and are making an impact in their chosen market or field. You may ask how will I see the success? I always go back to the first rule, you must make more than you spend. I would like to cheer for your success, whatever that may be.

To me, this book is one of the keys to success, the key of financial literacy.

Dr Marcus Powe

Entrepreneur in Residence

RMIT University, Australia

Awarded Australias Best Entrepreneurial Educator in 2008

Acknowledgments

Firstly, to my parents who have been a constant support by allowing me to be a bachelor, and supporting my dream of becoming an entrepreneur.

To all my teachers in school and university for helping me realise that after 22 years I did not want to pursue my career as a civil engineer.

To my ex-girlfriends without whom this book would have been completed much earlier!

To several accountants who gave me the time to see them but scared me with accounting jargon and made me feel like the dumbest guy on the planet. Except Dr. Anil Lamba who got me excited about finance and nudged my curiosity to learn more about financial reports. Also, special thanks to Prof. Google for being available anytime even though later I took a second opinion to avoid using my Public Liability and Professional Indemnity Insurance.

To all my critics who said I am not qualified to be a Financial Educator. Except Dr. Marcus Powe, who saw my presentation and said Good! And getting good from me is not easy. His words made me believe in my service and pushed me to write this book.

I would also like to thank my well-wishers, Dr. Arthur Shelley, Helen Palmer, Joss Evans and Louise Lucas.

To my housemates and friends for testing my patience and will-power by having regular house parties. And also for helping me financially when I came to Australia in 2012 with just $400.

I would like to express my gratitude to the many people who saw me through this book, to all those who provided support, talked things over, offered comments, and also confused me during the process.

Finally, I beg forgiveness of all those who have been with me over the years and whose names I have failed to mention.