Keys to Reading an Annual Report

by Friedlob, G. Thomas; Welton, Ralph E.

• ISBN13: 9780764113062
• ISBN10: 0764113062
• Edition: 3rd
• Format: Paperback
• Copyright: 2001-01-01
• Publisher: Barrons Educational Series Inc

Summary

How to cut through the public relations jargon and analyze a company's financial health and future prospects as it's spelled out in an annual report. Sound advice for non-expert investors in the stock market. New topics covered and explained in this edition include annual reports on the Internet, materiality, and financial derivatives. Titles in the easy-to-understand Business Keys series are directed at consumers and non-professionals, with advice on saving, investing, protecting assets, and increasing wealth through prudent money management. The books define terms, cut through business jargon, speak in plain language, and take the mystery out of business.

Table of Contents

Section I--Understanding Annual Report Components
Understanding This Book	1	(2)
What Is an Annual Report?	3	(2)
Highlights, Letter, and Management's Discussion and Analysis	5	(2)
Financial Statements and Notes	7	(2)
Annual Reports on the Internet	9	(2)
Section II--Understanding Financial Statements
Basic Accounting Principles	11	(4)
Materiality	15	(2)
Note One	17	(2)
Notes on Commitments, Including Leases and Contingent Liabilities	19	(4)
Notes Relating to Pension and Post-Retirement Benefits	23	(5)
Segmental and Company-Wide Information	28	(5)
Management Reports on Internal Control	33	(4)
Audit Reports	37	(2)
Compilation and Review Reports	39	(2)
SEC Forms 10-K, 10-Q, and 8-K	41	(3)
Components of the Balance Sheet	44	(5)
Current Assets	49	(2)
Cash and Receivables	51	(3)
Inventories	54	(3)
Property, Plant and Equipment	57	(2)
Depreciation	59	(5)
Intangibles and Other Assets	64	(3)
Depletion and Amortization	67	(2)
Investments	69	(6)
Current Liabilities	75	(2)
Noncurrent Liabilities	77	(4)
Bonds and Amortization	81	(3)
Owners' Equity	84	(2)
Classes of Stock	86	(5)
Treasury Stock	91	(2)
Retained Earnings and Appropriations	93	(2)
Donated Capital and Subscribed Stock	95	(2)
Stock Issued to Employees	97	(5)
Income Statement Components	102	(6)
Sales and Other Revenues	108	(3)
Bad Debts	111	(2)
Cost of Goods Sold and Inventories	113	(3)
Manufacturing Costs	116	(2)
Operating Expenses	118	(2)
Discontinued Operations	120	(4)
Extraordinary Items	124	(3)
Taxes and Tax Deferrals	127	(4)
Comprehensive Income	131	(3)
Derivatives	134	(3)
Accrual Accounting Versus Cash Flow	137	(2)
Statement of Cash Flows	139	(2)
Consolidated Financial Statements	141	(4)
Quarterly Statements	145	(2)
Earnings Per Share	147	(4)
Section III--Analyzing Financial Statements
Ratio Analysis	151	(3)
Profitability Ratios	154	(3)
Activity Ratios	157	(2)
Liquidity Ratios	159	(2)
Cash Flow Ratios and Quality of Earnings	161	(2)
Overall (Debt and Equity) Ratios	163	(2)
Operating and Financial Leverage	165	(4)
Common Size Statements	169	(3)
Financial Statement Comparability	172	(3)
Annual Reports of Foreign Companies	175	(3)
Questions and Answers	178	(4)
Glossary	182	(6)
Index	188