Chapter 1

Financial Report Basics

In This Chapter

arrow Reviewing the importance of financial reports

arrow Exploring the different types of financial reporting

arrow Discovering the key financial statements

arrow Getting acquainted with the parts of the annual report

arrow Looking at the three most important documents

arrow Summing up the financial information

Financial reports give a snapshot of a company’s value at the end of a particular period, as well as a view of the company’s operations and whether it made a profit. The business world couldn’t function without financial reports. Yes, fewer scandals would be exposed because companies wouldn’t be tempted to paint false but pretty financial pictures, but you’d still need a way to gauge a firm’s financial health.

At this point in time, nothing’s available that can possibly replace financial reports. Nothing can be substituted that’d give investors, financial institutions, ...

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