Reading Financial Reports For Dummies
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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.

About This Article

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About the book author:

Lita Epstein, who earned her MBA from Emory University’s Goizueta Business School, enjoys helping people develop good financial, investing and tax-planning skills.
While getting her MBA, Lita worked as a teaching assistant for the financial accounting department and ran the accounting lab. After completing her MBA, she managed finances for a small nonprofit organization and for the facilities management section of a large medical clinic.
She designs and teaches online courses on topics such as investing for retirement, getting ready for tax time and finance and investing for women. She’s written over 20 books including Reading Financial Reports For Dummies and Trading For Dummies.
Lita was the content director for a financial services Web site, MostChoice.com, and managed the Web site, Investing for Women. As a Congressional press secretary, Lita gained firsthand knowledge about how to work within and around the Federal bureaucracy, which gives her great insight into how government programs work. In the past, Lita has been a daily newspaper reporter, magazine editor, and fundraiser for the international activities of former President Jimmy Carter through The Carter Center.

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