Customer Reviews

How to Read a Financial Report: Wringing Vital Signs Out of the Numbers

5 star:		(31)
4 star:		(7)
3 star:		(3)
2 star:		(1)
1 star:		(1)

 

 

This book is great for anyone ranging from beginner to intermediate knowledge of financial reports. I have taken accounting and finance classes in college. This book tells the same things that 600 page textbooks and hours and hours of lecture can tell you, but it does so in an easy to understand and concise manner.

Most important it explains the relationships clearly between the income statement, balance sheet, and cashflow statement. This book would be great for anyone starting an education in finance or for any investor trying to broaden their knowledge base. If you invest in stocks, you should learn how to read financial statements. This book will give you some much needed knowledge that you can use as you scour for companies to invest in.

This author takes pride in his writing. John A. Tracy is a professor of accounting, but his knack for concise explanations and the clear use of the English language is evident throughout.

As a teacher of business management, I have found the one component of training that often frustrates most students is understanding and preparing a cash flow statement, profit and loss statement and a balance sheet. This book is written in a manner which certainly simplifies the understanding of the statements, but it would definitely be a plus if the reader had some prior knowledge of basic accounting principles.

Financial statements are, for some, a challenge and one they can easily master with an understanding of basic accounting. For others with no prior knowledge of accounting, financial statements can be a nightmare. While this book will HELP TO SIMPLIFY the matter, without some previous experience the book may be quite confusing. First of all, one should at least be familiar with general accounting terminology. If you are, it will simplify this book enormously and make the learning experience more enjoyable. However, be prepared to sit down and devote your utmost concentration to the book. The subject matter is not one that can be mastered by skimming through the book in an evening or two. For many individuals, understanding financial statements is a course that takes months to completely understand. Some learn the process easily, others never master the challenge no matter how long or hard they try. The degree of success usually depends, in part, on apptitude, commitment and previous knowledge and experience of the reader.

I have used this book to teach people with absolutely no training in accounting to understand financial statements. It appeals to non-quantitative and quantitative audiences alike. Non-quantitative audiences appreciate the plain language in which the book is written. Quantitative audiences immediately see how financial statements are laid out from a modelling point of view and invariably start coding up spreadsheets. People who need to explain anything related to financial statements should thoroughly read this book to see how clearly this topic can be treated.

Another aspect of this book is the ratio of success-to-effort one gets out of reading this book. Professsor Tracy's experience and time spent thinking about this topic is clearly demonstrated by his ability to explain just enough to allow even the rank beginner to understand financial statements.

As an MBA student and a director of a small business, I doubt I have read a more useful book. Together with his 'Budgeting a la Carte', John Tracy cuts to the heart of company financials in a very clear and readable manner. I never thought I'd sit up and get excited about this subject, but these 2 books really shed light on the nuts and bolts of company finance without being long winded or dull. A 'must read' for anybody trying to get to grips with this subject and any small business owner not trained in accounting. Well done Mr Tracy!

Everyone is familiar with the "Dummies" book series, and, perhaps, we all have a dozen of them on our shelves. In many cases, we reach for the "Dummies" books, because they represent our first foray into a subject we know nothing about, like "Fishing for Dummies," and we feel like we need to get a "handle" on it. In other words, we are non-experts, we'd like to learn from the experts, but we don't want to become an expert. We just want to "understand" the subject, so that we don't look stupid at work or during cocktail party conversations.

The big "letdown" with most "Dummies" books I've read is that they're too wordy, too thin on substance, and you feel like you're wanting more. THIS IS NOT THE CASE WITH "HOW TO READ A FINANCIAL REPORT" BY JOHN TRACY.

Instead, Tracy's book is that rare book for "non-majors" that is written clearly, does not require prior knowledge of the subject, and may be all that a "non-financial" manager, such as a salesperson, marketing manager, office manager -- or maybe even an individual investor -- might need to understand how to read balance sheet.

Tracy's book is far from wordy, and, clocking in at around 100 pages, it is pithy. More importantly, the book is extremely well-illustrated in such a way that the reader is not treated to financial concepts, but is actually taught the "skill" of reading an income statement, a balance sheet or a cash flow report, something which "Fishing for Dummies" has yet to do for me.

With Tracy's book, I will never have to read a 400-page tome on accounting or finance. If I am in trouble, I'll simply need to read this book, never confusing "net" and "gross" again.

I found this book on my own before going to get my MBA and was always a bit embarrased to admit that I had learned more from this book than any other (it's design makes it look a bit elementary). I was pleasantly surprised to see that my Finance professor at the MBA program (Babson - the #1 entrepreneurship program 11 years running) brought it out on the first day and said it was a "must" for any businessperson's library!

It is a fantastic resource - don't let the look fool you!

No matter how hard I listen to people explain financial reports to me, I just don't get it. This book is a show-n-tell, which for me, is the way I learn. Don't get me wrong, this is not a "simple" book. Our investment club is meant to be educational. This book is an excellent teacher.

This is a somewhat strange introduction to the reading and interpretation of financial statements. The book is not basic enough for newcomers, yet it is not thorough enough for experienced people either.

The main problems I have with this book are 1) the language is sometimes difficult to understand especially in the introductory chapters of the book, and 2) the book gives a lot of "don'ts" but not many "do's" - for instance regarding the measurement of cash flow, the author tells you all the wrong ways of doing it, but neglects to tell you the right way of measuring cash flow.

I have given the book 3 stars because it does have some interesting parts. But if you're new to accounting I would instead recommend getting the book Financial Statements by Thomas Ittelson.

PS: This review is for the Sixth Edition of the book.

John Tracy does an excellent job of reviewing the basics of reading a financial report. His treatment of how the Balance Sheet, Income, and Cash Flow Statements are related to each other is simple and to the point. He also discusses how various depreciation and inventory methods impact the financial reports. The book is easy to read and well organized. Anyone who is new to financial reports or who wants to brush up on financial reports since their accounting days in college should find this book useful.

I took an accounting course my freshman year in college and thought it was the most dull class I had ever taken so I barely went to class and struggled my way through. Three years later I had an internship with a hedge fund working as an analyst so I needed to freshen up on my financial report reading skills. Someone in my office suggested this book and I am extremely thankful that they did because it was a tremendous help! It gives you a very strong (though probably basic) understanding of how to read AND understand a balance sheet, income statement and statement of cash flows. Not only does the book go through each of these elements of a financial report seperately, it also shows how they are all interrelated and connect to one another, giving one a better understanding of the big picture. I would definitely recommend this to someone who does not have a very solid background in accounting or understanding of financial reports.