Published in the year 2009, Financial Statements: A Step-By-Step Guide To Understanding And Creating Financial Reports is a book that provides the readers with insights into the basics of financial accounting.
Summary Of The Book
Financial Statements: A Step-By-Step Guide To Understanding And Creating Financial Reports came into being because of Ittelson’s desire to teach the readers to design and utilize financial statements in their businesses. This book is written for absolute beginners who have no prior knowledge of accounting. In most cases, financial and accounting books are not a hit with the readers due to the fact that they are drafted by accountants, for accountants.
Ittelson starts off by explaining that assets are a combination of the owners’ equity and liability. This is one of the fundamentals of accounting and he explains that those who want to become real investors need to understand ways to analyze their balance sheet, income statement, and cash flow statement. It is important to understand that although this book doesn’t contain highly advanced topics on accounting, it will definitely give the readers the foundation they need to have, to deal with advanced accounting. In total, this book comprises twenty two chapters. Some chapters include Cooking the Books, Sources and Costs of Capital, The Time Value of Money, The Income Statement, and Twelve Basic Principles.
He explains these three important financial statements by giving an example of a company that manufactures applesauce. After some time, the company decides to expand their business and purchase a machine worth 250,000 dollars, paying half the money upfront and the remaining, after the installation is complete. He explains that the company now has 125,000 dollars less on their balance sheet, while it has 125,000 dollars more of plants, property, and equipment. However, this transaction appears under PP&E purchases on the cash flow statement, decreasing the overall cash balance.
Using this example and many more, Ittelson provides the readers with detailed, yet easy to understand information on developing financial statements. This edition contains nine new chapters and has been divided into two sections. Financial Statements: A Step-By-Step Guide To Understanding And Creating Financial Reports is highly recommended for undergraduate and MBA students, lenders, entrepreneurs, stock-market investors, non-financial managers, and lawyers, who want to gain insight into the fundamentals of financial accounting.
About Thomas R. Ittelson
Thomas R. Ittelson is an author and entrepreneur.
Ittelson completed his undergraduate degree in Biochemistry from Harvard College, and went to finish his postgraduate degree from Harvard Medical School. He has more than three decades’ experience in strategic planning, business development, and technology transfer in the industry of science and technology. He has served as the Director of the Intellectual Property Office at the Whitehead Institute. During his time there, Ittelson was responsible for technology licensing, corporate sponsored research, and corporate collaborations. He also handled negotiations among the firm and partners such as Bristol-Myers Squibb, Genomic Collaborative, Cellomics, Millennium, Genset, and Merck and Pfizer Inc.
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