The Interpretation of Financial Statements |  | Authors: Benjamin Graham, Spencer B. Meredith
Creator: Michael F. Price
Publisher: HarperBusiness
List Price: $30.00
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Rating:  23 reviews
Sales Rank: 8982
Media: Hardcover
Pages: 144
Number Of Items: 1
Shipping Weight (lbs): 0.5
Dimensions (in): 7.3 x 5.3 x 0.8
ISBN: 0887309135
Dewey Decimal Number: 657.3
EAN: 9780887309137
ASIN: 0887309135
Publication Date: January 15, 1998
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Product Description
"All investors, from beginners to old hands, should gain from the use of this guide, as I have."
From the Introduction by Michael F. Price, president, Franklin Mutual Advisors, Inc. Benjamin Graham has been called the most important investment thinker of the twentieth century. As a master investor, pioneering stock analyst, and mentor to investment superstars, he has no peer. The volume you hold in your hands is Graham's timeless guide to interpreting and understanding financial statements. It has long been out of print, but now joins Graham's other masterpieces, The Intelligent Investor and Security Analysis, as the three priceless keys to understanding Graham and value investing. The advice he offers in this book is as useful and prescient today as it was sixty years ago. As he writes in the preface, "if you have precise information as to a company's present financial position and its past earnings record, you are better equipped to gauge its future possibilities. And this is the essential function and value of security analysis." Written just three years after his landmark Security Analysis, The Interpretation of Financial Statements gets to the heart of the master's ideas on value investing in astonishingly few pages. Readers will learn to analyze a company's balance sheets and income statements and arrive at a true understanding of its financial position and earnings record. Graham provides simple tests any reader can apply to determine the financial health and well-being of any company. This volume is an exact text replica of the first edition of The Interpretation of Financial Statements, published by Harper & Brothers in 1937. Graham's original language has been restored, and readers can be assured that every idea and technique presented here appears exactly as Graham intended. Highly practical and accessible, it is an essential guide for all business people--and makes the perfect companion volume to Graham's investment masterpiece The Intelligent Investor.
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Showing reviews 1-5 of 23
 Simple but Good August 12, 2009
Mariusz Skonieczny (ClassicValueInvestors.blogspot.com)
1 out of 1 found this review helpful
This is a very short book on how to analyze financial statements. It is written in simple English that most people can understand. Because it was written in the `30s, it should not be the only book that investors read on financial statements, but it should definitely be one of many. Warren Buffett learned a lot from Benjamin Graham and so can you.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
Great book for quick read on financial statements. February 24, 2009
hapat
Its a great book for quick read up on financial statements and understanding basics of it. Should be followed up with books like security analysis by the same author for in-depth understanding
 Outdated language and examples January 24, 2009
Houman Tamaddon (Seattle, WA)
5 out of 5 found this review helpful
Value investing is timeless and Ben Graham is the master of it, but that does not make his books necessarily worthy of reading. Understanding companies' financial statements is imperative for any serious investor but I do not recommend this book as your main source. This was written in 1937. The examples (mainly railroads and utilities) are out dated. Cash flow statements were not even used at that time. GAAP did not exist. If you are interested in better understanding of financial statements, I recommend the following three books instead:
Reading Financial Reports For Dummies by Lita Epstein
How to Read a Financial Report by John Tracy
Financial Statements by Thomas Ittelson
Meet the father of value investing... and Warren Buffett's mentor October 30, 2008
David Vilage (NYC)
3 out of 3 found this review helpful
"In 1984, [Warren] Buffet returned to Columbia to give a speech commemorating the fiftieth anniversary of the publication of "Security Analysis". During that speech, he presented his own investment record as well as those of Ruane, Knapp, and Schloss [other successful investment managers who were students of Graham at Columbia]. In short, each of these men posted investment results that blew away the returns of the overall market. Buffett noted that each of the portfolios varied greatly in the number and type of stocks, but what did not vary was the managers' adherence to Graham's investment principles."
It is difficult to encapsulate Benjamin Graham's investing style in a few sentences or paragraphs. Readers are strongly urged to refer to his "The Intelligent Investor" to obtain a more thorough understanding of his investment principles.
In brief, the essence of Graham's value investing is that any investment should be worth substantially more than an investor has to pay for it. He believed in thorough analysis, which we would call fundamental analysis. He sought out companies with strong balance sheets, or those with little debt, above-average profit margins, and ample cash flow. (For more insight, see Introduction To Fundamental Analysis and Testing Balance Sheet Strength.)
He coined the phrase "margin of safety" to explain his common-sense formula that seeks out undervalued companies whose stock prices are temporarily down, but whose fundamentals, for the long run, are sound. The margin of safety on any investment is the difference between its purchase price and its intrinsic value. The larger this difference is (purchase price below intrinsic), the more attractive the investment - both from a safety and return perspective - becomes. The investment community commonly refers to these circumstances as low value multiple stocks (P/E, P/B, P/S).
Graham also believed that market valuations (stock prices) are often wrong. He used his famous "Mr. Market" parable to highlight a simple truth: stock prices will fluctuate substantially in value. His philosophy was that this feature of the market offers smart investors "an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal."
 Too short. October 24, 2008
Ratatosk (Europe)
2 out of 2 found this review helpful
This book is a brief summary of how to interpret financial statements. While the book has some good points my main complaint is with its brevity. It also appears this book is best suited for those already familiar with the subject, perhaps as a short reminder of what to look for in financial statements.
I think this book would have been better if it had been expanded somewhat and possibly also if it had been included in either the book Security Analysis or in The Intelligent Investor. You should also note that this book is from 1937 and both accounting terminology and standards have changed somewhat since then, as have the types of businesses that exist.
If you are looking for a book that explains accounting really well at a beginner's level then I would instead recommend: Financial Statements by Thomas Ittelson. If you are looking for a book that reviews in more depth the interpretation of financial statements I would recommend: Analysis for Financial Management by Robert Higgins.
Showing reviews 1-5 of 23
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