Financial Statements: Step-by-Step Guide to Understanding and Creating Financial Reports (Revised and Expanded Edition)

Financial Statements: Step-by-Step Guide to Understanding and Creating Financial Reports (Revised and Expanded Edition)

Thomas R. Ittelson

Language: English

Pages: 304

ISBN: 2:00326499

Format: PDF / Kindle (mobi) / ePub


Now the best-selling book of its kind has gotten even better. This revised and expanded second edition of Ittelson's master work will give you that firm grasp of "the numbers" necessary for business success. With more than 100,000 copies in print, Financial Statements is a perfect introduction to financial accounting for non-financial managers, stock-market investors, undergraduate business and MBA students, lawyers, lenders, entrepreneurs, and more.

Most introductory finance and accounting books fail either because they are written "by accountants for accountants" or the authors "dumb down" the concepts until they are virtually useless. Financial Statements deftly shows that all this accounting and financial-reporting stuff is not rocket science and that you can understand it! Ittelson empowers non-financial managers by clearly and simply demonstrating how the balance sheet, income statement and cash flow statement work together to offer a "snapshot" of any company's financial health. Every term is defined in simple, understandable language. Every concept is explained with a basic, straightforward transaction example. And with the book's uniquely visual approach, you'll be able to see exactly how each transaction affects the three key financial statement of the enterprise.

Two new major sections with nine new chapters were added to this revised second edition of Financial Statements, simply the clearest and most comprehensive introduction to financial reporting available.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

................................................................... 15 The Balance Sheet is one of the two main business nancial statements... the other is the Income Statement. The Balance Sheet states the basic equation of accounting at an instant in time: What you have minus what you owe is what you’re worth. Chapter 3. The Income Statement ............................................................ 43 One of the two main nancial statements of a business...the other is the Balance Sheet.

1,750,000 78,573 1,671,427 FIXED ASSETS @ COST ACCUMULATED DEPRECIATION NET FIXED ASSETS $3,184,419 TOTAL ASSETS $236,297 26,435 100,000 139,804 502,536 ACCOUNTS PAYABLE ACCRUED EXPENSES CURRENT PORTION OF DEBT INCOME TAXES PAYABLE CURRENT LIABILITIES 800,000 LONG-TERM DEBT 1,550,000 331,883 1,881,883 CAPITAL STOCK RETAINED EARNINGS SHAREHOLDERS' EQUITY TOTAL LIABILITIES & EQUITY $3,184,419 — 87 — Fixed Asset Cycle This page intentionally left blank How to Use This Section

25,900 (25,900) 0 0 ($25,900) NET SALES COST OF GOODS SOLD GROSS MARGIN SALES & MARKETING RESEARCH & DEVELOPMENT GENERAL & ADMINISTRATIVE OPERATING EXPENSE INCOME FROM OPERATIONS NET INTEREST INCOME INCOME TAXES NET INCOME = — — sum $0 0 0 7,680 0 18,220 25,900 (25,900) 0 0 ($25,900) — — — — — 0 IS Transaction Sum Cash Flow Statement for the period including Transactions 1 through 10 a b c b-c=d e f g h a+d-e+f-g+h=i BEGINNING CASH BALANCE CASH RECEIPTS CASH DISBURSEMENTS CASH FLOW FROM

CURRENT LIABILITIES LONG-TERM DEBT CAPITAL STOCK RETAINED EARNINGS SHAREHOLDERS' EQUITY TOTAL LIABILITIES & EQUITY $747,240 0 380,300 0 1,127,540 0 1,750,000 7,143 1,742,857 $2,870,397 $341,077 10,320 100,000 0 451,397 900,000 1,550,000 (31,000) 1,519,000 $2,870,397 + transaction 2 (150,000) — — — — — — (150,000) Assets Sum 3 (150,000) — — — — — — (150,000) = $597,240 0 380,300 0 977,540 0 1,750,000 7,143 1,742,857 $2,720,397 $191,077 10,320 100,000 0 301,397 900,000 1,550,000 (31,000)

simplify the presentation of the nancial position of the rm and aids in the preparation of nancial statements. If during the review of a corporation’s books, the accountant has reason to believe that the company may go bankrupt, he must issue a “qualied opinion” stating the potential of the company’s demise. More on this concept later. 3. Measurement. Accounting deals with things that can be quantied— resources and obligations upon which there is an agreed-upon value. Accounting only deals

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