Chapter 7

Getting a Financial Report Ready

IN THIS CHAPTER

Bullet Keeping up to date on accounting and financial reporting standards

Bullet Assuring that disclosure is adequate and reasonably transparent

Bullet Nudging the numbers to make profit and solvency look better

Bullet Contrasting financial reports of public and private companies

Bullet Dealing with information-overload financial reports

Bullet Scrutinizing the statement of changes in owners’ equity

The previous three chapters cover fundamentals of the three primary financial statements of a business. To review briefly:

  • Balance sheet (Book 2, Chapter 4): Summarizes the financial condition (consisting of amounts for assets, liabilities, and owners’ equity) at the closing date of the income statement period and at other times as needed by managers. Its formal name is the statement of financial condition, or statement of financial position.
  • Income statement (Book 2, ...

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