Review: The Interpretation of Financial Statements

by Benjamin Graham

Benjamin Graham has served as an inspiration to such legendary investors as
Warren Buffett and Walter Schloss. His classic book on investment The Intelligent Investor is considered a
classic.

In 1934, Graham wrote, in conjunction with David Dodd, what is considered to
be the standard book on stock investment principles, Security Analysis. Its size and
complexity make it difficult reading for the lay investor but Graham has
overcome this to some extent with his explanatory book, the subject of this
review.

In The Interpretation of Financial
Statements, Graham explains, and illustrates, the meaning of those
financial terms and principles that need to be understood by anyone considering
a stock market investment. Complex concepts like current ratio, intangible
assets and book value become much clearer after a reading of this book. Graham
takes the reader through balance sheets, profit and loss accounts, and
financial statements, chatting comfortably to the reader about the complexities
of debt accrual and amortisation with humor and common sense.

As Warren Buffett has said on many occasions, if you don’t understand the
business, don’t invest in it. This 115-page book makes it all that much easier
to look beyond a company’s financial statements and discover the truth.

There is an excellent glossary that defines essential financial and
investment terms.

While several of Graham’s examples may be dated, the text is not and remains
as current as today’s Dow Jones Index.

This is a book that nobody seriously considering a stock investment should
be without. Even non-stock investors with an indirect interest in the stock
market through retirement and mutual funds can benefit from a reading of this
book. It can help them understand what their fund managers are doing with their
money.

An essential work for the investor’s bookshelf.

Purcase The
Interpretation of Financial Statements at Amazon.com