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How to Read a Financial Report - John A. Tracy


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      WRINGING VITAL SIGNS OUT OF THE NUMBERS

       Ninth edition

       JOHN A. TRACY AND TAGE C. TRACY

      Copyright © 2020 by John A. Tracy and Tage C. Tracy. All rights reserved.

      Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

      The Eighth Edition of How to Read a Financial Report: Wringing Vital Signs Out of the Numbers was published by John Wiley & Sons, Inc, in 2014.

      Published simultaneously in Canada.

      No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.

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       Library of Congress Cataloging-in-Publication Data:

      Names: Tracy, John A., author. | Tracy, Tage C., author.

      Title: How to read a financial report: wringing vital signs out of the

       numbers / John A. Tracy and Tage C. Tracy.

      Description: Ninth edition. | Hoboken, New Jersey : Wiley, [2020] |

       Includes index.

      Identifiers: LCCN 2019035972 (print) | LCCN 2019035973 (ebook) | ISBN

       9781119606468 (paperback) | ISBN 9781119606451 (Adobe PDF) | ISBN

       9781119606482 (epub)

      Subjects: LCSH: Financial statements.

      Classification: LCC HF5681.B2 T733 2020 (print) | LCC HF5681.B2 (ebook) |

       DDC 657/.3—dc23

      LC record available at https://lccn.loc.gov/2019035972 LC ebook record available at https://lccn.loc.gov/2019035973

      CONTENTS

      1  Cover

      2  PREFACE TO THE NINTH EDITION

      3  Part One FUNDAMENTALS 1 STARTING WITH CASH FLOWS Summary of Cash Flows for a Business What Does Cash Flows Summary Not Tell You? Profit Is Not Measured by Cash Flows Cash Flows Do Not Reveal Financial Condition A Final Note Before Moving On 2 TWO BEDROCK FINANCIAL STATEMENTS Need for Financial Information Reporting Profit Performance: The Income Statement Reporting Financial Condition: The Balance Sheet 3 REPORTING CASH FLOWS Statement of Cash Flows Cash Versus Accrual Accounting Financial Tasks of Business Managers 4 FITTING TOGETHER FINANCIAL STATEMENTS One Problem in Financial Reporting Connecting the Dots

      4  Part Two CONNECTIONS 5 SALES REVENUE AND ACCOUNTS RECEIVABLE Exploring One Link at a Time How Sales Revenue Drives Accounts Receivable Accounting Issues 6 COST OF GOODS SOLD EXPENSE AND INVENTORY Holding Products in Inventory Until They Are Sold Inventory Control Accounting Issues 7 INVENTORY AND ACCOUNTS PAYABLE Acquiring Inventory on the Cuff Accounting Issues 8


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