How to Read a Financial Report by Tracy, John A. -- Read -- Imperial Library of Trantor

Index

HOW TO READ A FINANCIAL REPORT: For Managers, Entrepreneurs, Lenders, Lawyers, and Investors, 7th Edition

PREFACE CONTENTS Part One: COMPONENTS AND CONNECTIONS IN FINANCIAL STATEMENTS

Chapter 1: STARTING WITH CASH FLOWS

Importance of Cash Flows: Cash Flows Summary for a Business What Does Cash Flows Summary NOT Tell You? Profit Cannot Be Measured by Cash Flows Cash Flows Do Not Reveal Financial Condition

Chapter 2: THE THREE FINANCIAL STATEMENTS

Reporting Financial Condition, Profit Performance, and Cash Flows Income Statement Balance Sheet Statement of Cash Flows

Chapter 3: PROFIT ISN’T EVERYTHING

The Threefold Task of Business Managers: Profit, Financial Condition, and Cash Flows One Problem in Reporting Financial Statements The Interlocking Nature of the Three Financial Statements Connecting the Dots

Chapter 4: SALES REVENUE AND ACCOUNTS RECEIVABLE

Exploring One Link at a Time How Sales Revenue Drives Accounts Receivable Accounting Issues

Chapter 5: COST OF GOODS SOLD EXPENSE AND INVENTORY

Holding Products in Inventory Before They Are Sold Accounting Issues

Chapter 6: INVENTORY AND ACCOUNTS PAYABLE

Acquiring Inventory on the Cuff Accounting Issues

Chapter 7: OPERATING EXPENSES AND ACCOUNTS PAYABLE

Recording Expenses Before They Are Paid Accounting Issues

Chapter 8: OPERATING EXPENSES AND PREPAID EXPENSES

Paying Certain Operating Costs Before They Are Recorded as Expenses Accounting Issues

Chapter 9: A UNIQUE EXPENSE: DEPRECIATION

Brief Review of Expense Accounting Depreciation Expense Accumulated Depreciation and Book Value of Fixed Assets Book Values and Current Replacement Values Intangible Assets Accounting Issues

Chapter 10: ACCRUING THE LIABILITY FOR UNPAID EXPENSES

Recording the Accrued Liability for Operating Expenses Bringing Interest Expense Up to Snuff Accounting Issues

Chapter 11: INCOME TAX EXPENSE AND ITS LIABILITY

Federal and State Income Taxation of Business Profit Accounting Issues

Chapter 12: NET INCOME AND RETAINED EARNINGS; EARNINGS PER SHARE (EPS)

Net Income into Retained Earnings Earnings per Share (EPS) Accounting Issues

Chapter 13: CASH FLOW FROM OPERATING (PROFIT-MAKING) ACTIVITIES

Profit and Cash Flow from Profit: Not Identical Twins! An Alternative View of Cash Flow Accounting Issues

Chapter 14: CASH FLOWS FROM INVESTING AND FINANCING ACTIVITIES

Rounding Out the Statement of Cash Flows Seeing the Big Picture of Cash Sources and Uses Accounting Issues

Chapter 15: FOOTNOTES TO FINANCIAL STATEMENTS

Financial Statements—Brief Review Why Footnotes? Two Types of Footnotes Management Discretion in Writing Footnotes Accounting Issues

Part Two: FINANCIAL STATEMENT ANALYSIS

Chapter 16: IMPACT OF GROWTH AND DECLINE ON CASH FLOW

Setting the Stage for Cash Flow Analysis Cash Flows in the Steady-State Case Cash Flow Growth Penalty Cash Flow Reward from Decline Red Ink and Cash Flow Final Comment

Chapter 17: FINANCIAL STATEMENT RATIOS

Purpose of Financial Statements Overview of Financial Statements Debt-Paying Ability, Liquidity, and Solvency Ratios Return on Sales and Return on Equity Ratios Earnings per Share (EPS) and Price/Earnings (P/E) Ratios Final Comments

Chapter 18: PROFIT ANALYSIS FOR BUSINESS MANAGERS

First, a Word about Managerial Accounting Classification of Operating Expenses in Management Profit Reports Comparing Equal Percent Changes in Sales Prices and Sales Volume

Part Three: RELIABILITY OF FINANCIAL REPORTS

Chapter 19: ACCOUNTING AND FINANCIAL REPORTING STANDARDS

Importance of Financial Reports Moving Toward International Financial Reporting and Accounting Standards A Fly in the Ointment Do Private Companies Need Separate Standards? Stock Options Unfinished Business

Chapter 20: ACCOUNTING METHODS AND MASSAGING THE NUMBERS

Chapter Preamble Choosing Accounting Methods Massaging the Numbers Business Managers and Their Accounting Methods Consistency of Accounting Methods Quality of Earnings Restatements of Financial Reports

Chapter 21: AUDITS OF FINANCIAL REPORTS IN THE POST-ENRON ERA

Opening Comments Why Audits? Certified Public Accountants Are Audits Required? Clean Audit Opinion Do Auditors Discover Accounting Fraud? Reading the Auditor’s Report Post-SOX

Chapter 22: PARTING COMMENTS

Basic Questions and Answers A Very Short Summary

INDEX

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