Reading Financial Reports For Dummies, 4th Edition
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Annual reports can be daunting, and you may be relieved to know that you don’t actually need to scour every page of one. The following parts best serve to give you the big picture:

  • Auditor’s report: Tells you whether the numbers are accurate and whether you should have any concerns about the future operation of the business

  • Financial statements: The balance sheet, the income statement, and the statement of cash flows; where you find the actual financial results for the year

  • Notes to the financial statements: Details about potential problems with the numbers or how the numbers were derived

  • Management’s discussion and analysis: The higher-ups’ breakdown of the financial results and other factors that impact the company’s operations

The rest is fluff.

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Lita Epstein, MBA, enjoys helping people develop good financial, investing, and tax planning skills. She designs and teaches online courses and has written more than 40 books, including Bookkeeping For Dummies and Reading Financial Reports For Dummies.

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