The Interpretation of Financial Statements (Hardcover)

~ (Author), (Author) "This book is designed to enable you to read financial statement intelligently..." (more)
Key Phrases: surplus statement, miscellaneous deductions, operating income, Capital Stock, Cost of Sales, Other Income (more...)

Editorial Reviews

Review

"Graham ranks as this century's (and perhaps history's) most important thinker on applied portfolio investment." -- John Train, author of The Money Masters

"[Graham]...formed the framework of thinking about the stock market that has inspired the investment community for nearly a century." -- Smart Money

Product Description

"All investors, from beginners to old hands, should gain from the use of this guide, as I have."
From the Introduction by Michael F. Price, president, Franklin Mutual Advisors, Inc.

Benjamin Graham has been called the most important investment thinker of the twentieth century. As a master investor, pioneering stock analyst, and mentor to investment superstars, he has no peer.

The volume you hold in your hands is Graham's timeless guide to interpreting and understanding financial statements. It has long been out of print, but now joins Graham's other masterpieces, The Intelligent Investor and Security Analysis, as the three priceless keys to understanding Graham and value investing.

The advice he offers in this book is as useful and prescient today as it was sixty years ago. As he writes in the preface, "if you have precise information as to a company's present financial position and its past earnings record, you are better equipped to gauge its future possibilities. And this is the essential function and value of security analysis."

Written just three years after his landmark Security Analysis, The Interpretation of Financial Statements gets to the heart of the master's ideas on value investing in astonishingly few pages. Readers will learn to analyze a company's balance sheets and income statements and arrive at a true understanding of its financial position and earnings record. Graham provides simple tests any reader can apply to determine the financial health and well-being of any company.

This volume is an exact text replica of the first edition of The Interpretation of Financial Statements, published by Harper & Brothers in 1937. Graham's original language has been restored, and readers can be assured that every idea and technique presented here appears exactly as Graham intended.

Highly practical and accessible, it is an essential guide for all business people--and makes the perfect companion volume to Graham's investment masterpiece The Intelligent Investor.

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Product Details

• Hardcover: 144 pages
• Publisher: HarperBusiness (May 6, 1998)
• Language: English
• ISBN-10: 0887309135
• ISBN-13: 978-0887309137
• Product Dimensions: 7.3 x 5.3 x 0.8 inches
• Shipping Weight: 8.3 ounces (View shipping rates and policies)
• Average Customer Review: 3.9 out of 5 stars  See all reviews (23 customer reviews)
• Amazon.com Sales Rank: #7,623 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

161 of 169 people found the following review helpful:

3.0 out of 5 stars Why This Edition Instead of 3rd/4th Edition?, June 19, 2003

By	S. Schneider (USA) - See all my reviews (REAL NAME)

Why they republished this edition when they might have republished the Second or Third Revised Edition (by Graham and Charles McGolrick, published in 1964 and 1975, respectively) beats me. The latter two editions are unquestionably better,as both are more current, and contain more useful tips regarding contextual interpretation.

It's true that the primary value of Graham's text is its framework, which provides concision in summarizing a potentially confusing topic. This framework persists through all four editions. Also, it's true that all four editions are pretty dated (there is no discussion of cash flow statement interpretation in any edition obviously, for example, although Graham alludes to the significance of cashflow interpretation somewhat disparagingly in the latter editions).

But all of Graham's guidelines for balance sheet analysis are still current in the latter two editions, as are his brief guidelines for bond analysis and earnings power. The first edition seems less useful in these respects.

One might assume that there is value in going back to the first edition of this small volume as one might go back to the first edition of Security Analysis. There are indeed nuggets in the first edition of Security Analysis which have been mysteriously removed from later editions. But that isn't true with The Interpretation of Financial Statements. If you can get your hands on a copy of the 1964 or 1975 edition of this book, you will likely find either more useful than this original edition.

127 of 133 people found the following review helpful:

3.0 out of 5 stars Why'd Didn't They Republish the 3rd Edition?, June 29, 1999

By A Customer

Why they republished this edition when they might have republished the Second Revised Edition (by Graham and Charles McGolrick, originally published in 1964) beats me. The latter is unquestionably better,as it is more current, and contains more tips. Yet even the 1964 edition is pretty dated (there is no discussion of cash flow statement interpretation, for example, although Graham alludes to cashflow somewhat disparagingly in this later edition). One might argue that there is value in going back to the 1st edition of this small volume as one might go back to the 1st edition of Security Analysis. There are indeed nuggets in the 1st edition of Security Analysis which have been mysteriously removed from later editions. But that isn't true with The Interpretation of Financial Statements. If you can find a copy of the 1964 edition of this book, you will likely find it more useful than the original.

50 of 53 people found the following review helpful:

5.0 out of 5 stars This is my investing bible, March 4, 2003

By	Super Trader - See all my reviews

Although corporate 10Q's have become more complex due to a lot of the offbalance sheet investments they do, e.g. Enron. If a company is honest and has value this book will help you find it. So the way I approach my investing I have to assume all companies are honest unless proven otherwise.

So much time is taken to explain diversification by many other books, but none gives you the practical expertise to make an informed decision. This book does. It is a handy reference that sits on my desk. I use it to review annual reports and to interpret online SEC filings just to make sure the companies I have invested in are actually healthy.

This book is small, but what I have found over the years is that smaller books are better. They leave out the fluff and all you get are the meat and potatoes of what you need to know.

If you take your time to understand the information presented and use it, you'll be teaching your broker a thing or two at the end of the day.