We cannot guarantee that The Interpretation of Financial Statements book is available in the library, click Get Book button to download or read online books. Join over 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. 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. 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. As a master investor, pioneering stock.
With an insider's view of the mind of the master, Mary Buffett and David Clark have written a simple guide for reading financial statements from Buffett's successful perspective. They clearly outline Warren Buffett's strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal. Financial statements give invaluable insights into the performance and future potential of a business.
But they do not evaluate the accounting results they reflect. This book offers practical insights into the essential information that financial statements reflect. Download or read online The Interpretation of Financial Statements written by njamin Graham,arles McGolrick, published by Unknown which was released on All too often, financial statements conceal more than they reveal. Even after the recent economic crisis, those analyzing financialstatements face serious new concerns and challenges.
Rearrangement of Income Statements Financial statements should be rearranged for proper analysis and interpretations of these statements. The items of operating revenues, non-operating revenues, operating expenses and non- operating expenses are rearranged into different heads and sub-heads are given below: Income Statement Operating Statement for the year endings.
Particulars Amount Rs. Amount Rs. Opening stock of Raw Materials Add: Purchases Less: Purchases Returns.. Freight and Carriage Less: Closing Stock of Raw Materials Raw Materials Consumed Add: Direct wages Factory Factory Rent and Rates Power and Coal Depreciation of Plant and Machinery Depreciation of Factory Building Work Manager's Salary Other Factory Expenses Add: Opening Stock of working progress Opening Stock of Finished goods Less: Closing Stock of work in progress Closing Stock of Finished goods Cost of Goods Sold Less: Net Sales Less sales return and Sales tax Administrative Expenses Selling Expenses Distribution Expenses s.
Add: Non-Operating Income : Interest Received Discount Received Dividend Received Income Form Investment.. Any other Non-Trading Income.. Less: Non. Interest on Payment on Loan and Overdraft Loss on Sale of Fixed Assets Net Profit Before Interest and Tax Less: Interest on Debenture Net Profit After Interest and Tax In order to judge the financial position qf a concern, it is also necessary to rearrange the balance sheet in a proper set of form.
For analysis and interpretation, the figures in Balance Sheet rearranged in a Vertical Form and given below. Cash in Hand Cash at Bank Bills Receivable Sundry Debtors Marketable Securities Other Short-Term Investments..
Liquid Assets Add: Stock in Trade Current Assets Less: Current Liabilities : Bills Payable Sundry Creditors Bank Loans Short-term Bank Overdraft Outstanding Expenses Accrued Expenses Trade Liabilities Other Liabilities Payable within year Total Current Liabilities : Add: Provisions: 4 Provision for Tax Proposed Dividend Provision for Contingent Liabilities Land and Buildings Plant and Machinery Loose Tools Furniture and Fixtures Patents and Copyrights Live Stock Investment in Subsidies.. Unquoted Investments Other Non-Trading Investments Advances to Directors Less: Long-Term Liabilities 10 Debenture Long-Term Debt Other Long-Term Loan payable after a year Financial Statements; Analysis and Interpretation 1 Comparative Financial Statements Under this form of comparative financial statements both the comparative Profit and Loss Account and comparative Balance sheet are covered.
Such comparative statements are prepared not only to the comparison of the vanous figures of two or more periods but also the relationship between various elements embodied in profit and loss account and balance sheet.
It enables to measure operational efficiency and financial soundness of the concern for analysis and interpretations. The following information may be shown in the comparative statements: a Figures are presented in the comparative statements side by side for two or more years.
Absolute Percentage in Rs. The rate of net profit is also increased to the extent of This indicates that the overall profitability of the concern is good. Profit and Loss Account for the Year and Cr. Particulars Particulars Rs. The gross profit has declined by - 4. It indicates that performance of operational efficiency is not much better and the cost of sales has not been under control. The Operating Profit and Net Profit have declined by - 8. This indicates that the overall profitability of a concern is not good.
Decrease in Rs. Comparative Balance Sheet as on ' Dec. The current liabilities has increased only to the extent of This indicates that the company will have no problem to meet the day-to-day expenses. It also observed that the current financial position of the concern has considerably increased. The fixed assets has increased by At the same time, long-term liabilities, share capital and reserve have considerably increased by It shows that the company has taken up expansion plans in a big way.
Under this method, financial statements are analysed to measure the relationship of various figures with some common base. Like this, in order to prepare the Common Size Balance Sheet, the total assets or total liabilities are taken as common base and all other items are expressed as a percentage of total assets and liabilities.
Term Liabilities : Long-Term Debts 1,00, Liabilities Assets Rs. Cash in ihand 3, 0. The cost of goods sold and its percentage increased by Administrative and selling and distribution expenses have been increased by 2.
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