Table Of Content“A witty, concise and delightfully logical guide for the high-tech
entrepreneur. Everything you need to know, but not a line more.
I’m already recommending it to the faculty, students and business
colleagues who are starting companies.”
Lita Nelsen
Director, Technology Licensing Ofce
Massachusetts Institute of Technology
Cambridge, Massachusetts
“I wish this book were around when I started my rst company.
The entrepreneur can learn in one evening’s reading what it took
me two years of learning-by-doing! I plan on giving a copy to every
CEO in our venture fund’s portfolio.”
Gordon B. Baty
Partner, Zero Stage Capital
Cambridge, Massachusetts
5 Star Reviews from Amazon.com Readers
The Best Book on Financial Statements, Period! Wow, what
a great book! I’m a technical professional and now no longer in the
nancially confused majority.
—Robert I. Hedges (Burnsville, MN)
Simply the Best! Clearly the rst introductory book one should
read. This book—a must on every managers shelf—adds value by
providing clear and concise denitions and relates them visually
to the changing nancial statements. A tremendous bang for buck.
Simply go get it and read it.
—ClimbHigh
The author has a gift that few experts have. He anticipates
all my newbie/beginner stupid questions… As soon as the little
voice in my head asks, “But why did they do it this way?” the au-
thor gives me the answer. This book has been of enormous value to
me. It is an essential reference for anyone who needs to understand
what business nances are about.
—M. Kramer (United States)
A Masterpiece. Every single nancial term is claried with a
layman’s language. Moreover, for every single term, there is a
very understandable example. Likewise, in every page there is a
sheet explaining all the transactions. I strongly believe that this
book is a masterpiece for non-nancial managers.
—a reader
Excellent! I purchased this book for an MBA course and ended up
using it more than the assigned text. The author makes a compli-
cated subject seem like child’s play!
—Bill Holcomb (Cleveland, OH)
Perfect book when rst learning… This is a wonderfully clear
and concise introduction to the interpretation of nancial state-
ments… Read this if you are not a CPA or MBA, but must “get a
handle” on Balance Sheets, Income Statements and Cash Flow
Statements. This should be the rst book you buy.
—Jack Fossen (Dallas, TX)
Outstanding!! Looking to understand how nancial statements
work?...then purchase this book—there's none better. I am a
graduate student nearing the completion of my MBA degree. The
author speaks in basic terms about what nancial statements
mean and how they work. This book puts it all together for the
reader.
—Joseph P. Gallagher (Bellinghan, WA)
A very useful book. While the book gets only skin deep on ac-
counting concepts, it does an excellent job in deconstructing how
the Income Statement, Statement of Cash Flows, and Balance
Sheet are changed. Very few accounting related books make ex-
plicit what happens the way this book does.
—R. Chonchol (Florida)
Want to understand nancial statements? I took an account-
ing class...and I had difculty interpreting nancial statements.
So I gambled and bought this book with a hope to unravel the
mystery on nancial statements. It really worked! Overall, the
knowledge gained exceeds multiple folds of the time and money in-
vested on this book!
—Tuan minh Tran
Excellent, buy it!! If you are in the nance business, of any
kind, and you are not an accountant, this book is for you.
—Richard Gomez (San Diego, CA)
WOW, Incredible. I took an accounting course at University, I
now wish that my professor used this book in the course. So easy
to understand and with great examples. Suitable for anyone who
wants to learn accounting the fast and easy way.
—Kavkazy (Toronto, Canada)
Revised and Expanded Edition
Financial
Statements
A Step-by-Step Guide
to Understanding
and Creating
Financial Reports
Franklin Lakes NJ
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Revised and Expanded Edition
Financial
Statements
A Step-by-Step Guide
to Understanding
and Creating
Financial Reports
by Thomas R. Ittelson
Copyright 2009 by Thomas R. Ittelson
All rights reserved under the Pan-American and International Copyright
Conventions. This book may not be reproduced, in whole or in part, in any
form or by any means electronic or mechanical, including photocopying,
recording, or by any information storage and retrieval system now known
or hereafter invented, without written permission from the publisher, The
Career Press.
FINANCIAL STATEMENTS, REVISED AND EXPANDED EDITION
Cover design by Jeff Piasky
Printed in the U.S.A. by Courier
To order this title, please call toll-free 1-800-CAREER-1 (NJ and Canada:
201-848-0310) to order using VISA or MasterCard, or for further informa-
tion on books from Career Press.
The Career Press, Inc., 3 Tice Road, PO Box 687,
Franklin Lakes, NJ 07417
www.careerpress.com
Library of Congress Cataloging-in-Publication Data
Available upon request.
I dedicate this book to Alesdair, who has had the good
sense to become a lawyer and not an accountant.
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Acknowledgments
Many people helped make this book possible. My special thanks go
to Isay Stemp, who rst showed me that knowing a little nance
and accounting could be fun; to my agent, Michael Snell, who
taught me how to write a book proposal; and to Lisa Berkman,
whose encouragement was invaluable as I drafted this revised and
expanded edition.
Many thanks to my publisher, Ronald Fry of Career Press, for
seeing promise in a preliminary version of this book and to Kristen
Parkes, editorial director for Career Press, for her guiding of this
book through to publication.
Again with this second edition, as was the case with the rst, I
am indebted to my colleague Jack Turner for his thoughtful review
of the words and numbers in this book. Also a special thanks to
Graham Eacott for his careful reading and correction of the rst
edition.
These clients, colleagues and friends at one time or another
helped me to develop (whether they realized it or not) the concepts
presented in this book. My thanks to Gwen Acton, Marci Anderson,
Molly Downer, Tim Duncan, Cavas Gobhai, Jack Haley, Katherine
Leahey, Paul McDonough, Lita Nelsen, Paul O’Brien, Mel Platte,
and Iruna and Chris Simmons.
