How to read a financial report
by John A. Tracy · first published 1980
83% recommend17% neutral
Why HN recommends it
Beginner-friendly introduction to reading financial statements and the numbers behind them; recommended as a starter for people new to accounting, entrepreneurs, and small-business owners judging a company's health.
Summarised by Claude from recommending comments
Hidden somewhere among all the numbers in a financial report is vitally important information about where a company has been and where it is going. This is especially relevant in light of the current corporate scandals. The sixth edition of this bestselling book is designed to help anyone who works with financial reports--but has neither the time nor the need for an in-depth knowledge of accounting--cut through the maze of accounting information to find out what those numbers really mean.
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…letters (not the Berkshire letters) is very helpful for someone managing small sums of capital, say below $10M In addition, you need to read and learn about financial accounting and valuation. John Tracy's How to Read a Financial Report is a good starter... for valuation Aswath Damodaran has a pretty good book that can be combined with McKinsey's book on the subject. Beyond that, some more advanced accounting books, especially forensic…
on “Ask HN: Steady 4-5% on $5 million?” ↗…Intelligent Investor, etc. are good, but if you're completely new to accounting, I think starting with more basic texts would be a better idea. Two that I liked and still refer to from time to time are How to Read a Financial Report by John A Tracy and Financial Statements: A Step-By-Step Guide to Understanding and Creating Financial Reports by Thomas R Ittelson.
on “Annual Letter to Berkshire Shareholders (2019) [pdf]” ↗…Taleb, Nassim Nicholas (2005/10) Fooled by Randomness, 2nd ed.; Black Swan: Impact of the Highly Improbable, 2nd ed. Vilar, Pierre (1976) A History of Gold and Money: 1450-1920 Tracy, John A. (2009) How to Read a Financial Report: Wringing Vital Signs out of the Numbers, 7th ed.
on “Ask HN: Book recommendations for understanding financial systems?” ↗Financial Intelligence for Entrepreneurs – Karen Berman & Joe Knight Simple Numbers, Straight Talk, Big Profits – Greg Crabtree The 1% Windfall – Rafi Mohammed Accounting Made Simple – Mike Piper How to Read a Financial Report – John A. Tracy Venture Deals – Brad Feld & Jason Mendelson And http://www.bloomberg.com/news/features/2016-05-30/the-untold...
on “Ask HN: What are the must-read books about economics/finance?” ↗…from the future. A common example is, if you are going to post a loss for the quarter, go ahead and throw every possible expense you can on it so that next quarter will look much better. I recommend How to Read a Financial Report by John Tracey. https://www.amazon.com/gp/aw/d/1118735846/ref=dbs_a_w_dp_111...
on “How Nasty Gal Went from an $85M Company to Bankruptcy” ↗Seems kind of light on the financial / accounting / capital allocation side of things. Graham and Rockefeller's biographies do expose readers to these topics, but adding books like How to Read a Financial Report and the Accounting Game would be helpful to any entrepreneur.
on “The 100 Best Business Books of All Time” ↗Investopedia? I don't have any advice here, but The Personal MBA[1] is a reading list, and their pick "How to Read a Financial Report: Wringing Vital Signs Out of the Numbers"[2] doesn't sound like the worst. But I haven't read it, so don't mistake this for a personal endorsement. [1]: https://personalmba.com/best-business-books/ [2]:…
on “Gitlab to lay off 7% of staff” ↗