The Layman’s Guide to Understanding Financial Statements: How to Read, Analyze, Create & Understand Balance Sheets, Income Statements, Cash Flow & More

This book is incredibly in-depth and should be in every business owner's repertoire, especially if they're a new business owner. I feel like anyone could learn a thing or two from this book for sure. Loved the in-depth explanations for every single term you might encounter, and it has good examples so that you're not just bogged down with finance-related vocabulary. This book covers everything you ever wanted to know about financial statements, and everything you never knew you needed to know. It's got stuff to avoid, how-tos, explanations, and every extra bit you might encounter while dealing with financial statements. Definitely worth the money.

Presented simply and in straightforward fashion, The Layman’s Guide To Understanding Financial Statements: How To Read, Analyze, Create & Understand Balance Sheets, Income Statements, Cash Flow & More delivers financial management savvy to readers as promised in its title. Readers are reminded early on in the introduction how extensive the topics covered in this book can be and may stand assured knowing that they have in their hands a robust guide to the key areas of accounting together in one place. The book comforts readers in expressing that it is not necessary to be or to hire an accountant in order to make sense or even to prepare financial statements. It also makes it clear that investing energy into financial management is ideal for maintaining a thriving and productive business model. It allows readers the option to determine at what extent they wish to interact within the fiscal side of their business, and at the very least offers readers with an in-depth knowledge base for interpreting financial statements even if the reader does not wish to involve themselves in preparing them. For those hardy on learning to prepare them from scratch, this guidebook teaches the skillset as well as pointing out the common costly errors that may be avoided, which many non-accounting experts mistakenly overlook. Taking into account the fact that readers may still prefer to hire accountants, reading this book enlightens ones ability to choose accordingly for whom would be granted access to take on such task and responsibility.Impeccably structured, this guidebook is organized in a digestible learning format beginning with apparent knowledge then working its way into delivering more complexity for financial mastery. The neat organization also serves to help readers refer exactly back to specific topics and tools they need while working on one’s finances. Financial jargon and terminology is highlighted in-depth, outlining and defining important concepts and common accounting vernacular. At times redundant for the sake of clarity, the book makes sure to be as clear as possible when delineating complex items. I recommend this book to entrepreneurial readers, business owners, and anyone looking into starting their own business venture to become fully capable of handling finances without feeling the need to outsource to other bookkeepers who may not be as competent or trustworthy as oneself. This book is a one-stop-shop that offers simple and learnable approaches for managing the fiscal side of business, allowing readers to apply such concepts with ease and assurance that the monetary aspect of one’s business is flowing and in order.

Good book to understand a spreadsheet and accounting which sill give you an overview of accounting principles and details for you to understand a financial statement

I thought this would be a good refresher on basic financial statements but I can't trust this book. On pg 50 the author states that, "it is a government requirement that all businesses prepare accurate financial statements and make the [typo for 'them'] public." This is not true. Not all businesses are required to make financial statements public. I then didn't trust the paragraphs following that. Then on pg 57- there's slightly fuzzy printing (all the statements are) of a Trial Balance sheet in which the monetary values have an extra comma and I thought, "Who writes like that?!" Fixed assets were written as 1,30,000 instead of 130,000 and the totals were written as 3,26,000 instead of 326,000. There's at least one other pg like this and at least one with normal commas. Inconsistent. And then on pg 63 in calculating Gross Profit and Gross Margin (yes this book has to have technical terms and calculations despite saying it won't) there is a huge error in math. The formulas are stated as: "Gross Profit = Gross Revenue - Direct Costs" "Gross Margin = Gross profit / Gross Revenue"(Another typo in the 'p') And the example is: "if you sell t-shirts in an uptown shop and you purchase 100 t-shirts at a cost of $10 each. Your direct expenses would be $1000. If you were to sell all the t-shirts at the price of $12 each, your total income would be $120. Your gross profit, in this case, would be $120 - $100 = $20, and your gross margin would be ($20 / $120) × 100 = 16.6% " WHOOPS..... gross profit should be $200. Gross margin is using the wrong numbers but does come out to the same percentage but the formula doesn't say to multiply by 100 so again, inconsistent. Initially I was hesitant on buying this book because a "lay person" wrote it but because of the good reviews and the book description of, "This book may also be used by accounting students who wish to sharpen their practical accounting skills," I was sold on giving it a try. But this was misleading and that's why I'm writing this review. This book is not good for accounting students.And while overall the book gives a general overview of financial statements and that seems to be okay, for the above reasons and others, I don't have confidence in its complete accuracy. I stopped reading on pg 63 because of it. I'm giving it a 3 because there is some valid info but don't rely solely on this book if you do buy it.

Good reference source for someone with no formal accounting training.

The book gives overview of the accounting and financial statements prepared in any business. It will be particularly useful to understand and decipher the financial statements i.e. Balance Sheet,Income Statement and Cash Flow Statement.