Financial Statements Quotes

When you are in the final days of your life, what will you want? Will you hug that college degree in the walnut frame? Will you ask to be carried to the garage so you can sit in your car? Will you find comfort in rereading your financial statement? Of course not. What will matter then will be people. If relationships will matter most then, shouldn't they matter most now?

The financial statements are just a starting point. By asking the right questions and actively engaging with the data, board members can gain a deeper understanding of the company's financial health and position themselves to make sound decisions that will ensure the company's long-term success.

Investors, creditors, and regulatory bodies rely on financial statements to make informed decisions. When internal metrics align with recognized standards, it enhances the credibility of your financial reports, fostering trust among these stakeholders.

I've always resented the smug statements of politicians, media commentators, corporate executives who talked of how, in America, if you worked hard you would become rich. The meaning of that was if you were poor it was because you hadn't worked hard enough. I knew this was a lie, about my father and millions of others, men and women who worked harder than anyone, harder than financiers and politicians, harder than anybody if you accept that when you work at an unpleasant job that makes it very hard work indeed.

Let us return to pathemata mathemata (learning through pain) and consider its reverse: learning through thrills and pleasure. People have two brains, one when there is skin in the game, one when there is none. Skin in the game can make boring things less boring. When you have skin in the game, dull things like checking the safety of the aircraft because you may be forced to be a passenger in it cease to be boring. If you are an investor in a company, doing ultra-boring things like reading the footnotes of a financial statement (where the real information is to be found) becomes, well, almost not boring.

A deep understanding of financial statements, accounting principles, and financial markets is crucial for overseeing the company's financial performance and making sound investment decisions.

By focusing on a few key financial metrics, board members can transform these statements from a labyrinth into a compass, guiding them through the company's financial landscape.

Connor pockets his cell. “Lily,” he says. “If I wanted to date for a last name, I’d have a girl on my arm every single day. I would never be single.” He leans forward. “I promise you, that my intentions are pure. And I think it’s sweet you’re looking out for Rose, but she’s more than capable of taking care of herself, which is one of the many reasons why I want to pursue her.” “What’s another reason?” I test him. He smiles. “I won’t have to taxingly explain to her menu items in a real French restaurant.” He knows she’s fluent? “I won’t have to explain financial statements or dividends. I’ll be able to discuss anything and everything in the world, and she’ll have an answer.

If we were not impressed by job titles, suits, and jargon, we would demand that financial advisors show us their personal bank statements before they tell us what we could or should do with our own money.

Even the financial disclosure statements that political bloggers were required to post hadn't stemmed the suspicion that people's opinions weren't really their own. "Who's paying you?" was a retort that might follow any bout of enthusiasm, along with laughter - who would let themselves be bought?

We are scaling down” is a painful statement to make to friends or family.

Remember, the financial statements are just a starting point. By asking the right questions and actively engaging with the data, board members can gain a deeper understanding of the company's financial health and position themselves to make sound decisions that will ensure the company's long-term success.

Honest accounting is a really important part of corporate responsibility. Let's just be honest and transparent with the numbers. No inflating, no exaggerating, no reconfiguring... Just pure numbers that tell the honest truth about the companies financial reality.

Creating a complete picture of a company financial health, by looking at periodic financial statements, is like turning a hamburger into a cow

When I opened the last [401k] statement, I jumped out of the window. True, it was the kitchen window and I only fell two feet, so the whole scene lacked drama, but I thought that was the required reaction to extreme financial turmoil in America. And I am nothing if not patriotic.

Say you have a dog, but you need to create a duck on the financial statements. Fortunately, there are specific accounting rules for what constitutes a duck: yellow feet, white covering, orange beak. So you take the dog and paint its feet yellow and its fur white and you paste an orange plastic beak on its nose, and then you say to your accountants, ‘This is a duck! Don’t you agree that it’s a duck?’ And the accountants say, ‘Yes, according to the rules, this is a duck.’ Everybody knows that it’s a dog, not a duck, but that doesn’t matter, because you’ve met the rules for calling it a duck.

The worst way to release bad news is to bury it in the financial statement footnotes, in the hope that no one will see it. A diligent investor or analyst always reads the footnotes, and will not appreciate having to dig so deep to uncover potentially critical information.

I’ve always resented the smug statements of politicians, media commentators, corporate executives who talked of how, in America, if you worked hard you would become rich. The meaning of that was if you were poor it was because you hadn’t worked hard enough. I knew this was a lie, about my father and millions of others, men and women who worked harder than anyone, harder than financiers and politicians, harder than anybody if you accept that when you work at an unpleasant job that makes it very hard work indeed.

If you don’t have regular and accurate financial statements, you’re driving your business 100 miles an hour down a one-way street the wrong way, at night, in the fog, without lights.

Even now, I am working to make sure that my family is set up for the future. When most people make that statement, they are talking about financial security for their last few years on earth. When I say it, I’m referring to the millions of years that come after that. People

A 10% loss in any investment can be recovered, not by 10%, but only by 11% gain. A 50% loss in any investment can be recovered only by 100% gain. And a 90% loss in any investment can be recovered only by a whopping 1,000% gain. Yes, all the above statements are true. Numbers can confuse the best of financial wizards. It needs a rare trait of common sense to unravel the mysteries of finance. For your investments: - Keep them Simple. - Avoid Jargons. - Exhibit Discipline. - Be Consistent. - Apply Common Sense

1. Accounting Entity The accounting entity is the business unit (regardless of the legal business form) for which the financial statements are being prepared. The accounting entity principle states that there is a “business entity” separate from its owners … a fictional “person” called a company for which the books are written.

You have to understand accounting and you have to understand the nuances of accounting. It's the language of business and it's an imperfect language, but unless you are willing to put in the effort to learn accounting - how to read and interpret financial statements - you really shouldn't select stocks yourself. - Warren Buffett

First, he evaluates a business on its long-term rather than its short-term prospects. Second, he always looks for businesses he understands. (This led him to avoid many Internet-related investments.) And third, when he examines financial statements, he places the greatest emphasis on a measure of cash flow that he calls owner earnings.

Progress is not one of those floating comparatives, so beloved of our friends in advertising, we need a context, a perspective. What are we better than? Who are we better than? Examine this statement: Most people are better off. Financially? socially? educationally? medically? spiritually? I dare not ask if you are happy? Are you happy?

ROA: is the company taking the best advantage of assets?   ROA is calculated by dividing the net profit by total assets. For

even if it’s boring and dull and soon to be forgotten, continue to learn double-entry bookkeeping. People think I’m joking, but I’m not. You should love the mathematics of business.

The company’s working capital is the amount of money left over after you subtract current liabilities from current assets. Current Assets  –  Current Liabilities  =  Working Capital

Book Value Book value represents the value at which assets are carried on the “books” of the company. The book value of a company is defined as its total assets less its current liabilities and less any long-term debt.

If during the review of a corporation’s books, the accountant has reason to believe that the company may go bankrupt, he must issue a “qualified opinion” stating the potential of the company’s demise. More on this concept later.

After that, Lily was recuperating and then dealing with significant financial hardships. The birth was described to me by Lily and also by her obstetrician, who I spoke to myself yesterday. The doctor, in his own words, remembers what he describes as that ‘hideous day’ like it was yesterday. The labour, intense and excruciating, lasted for days. In the end, in extreme distress at the length of the labour, the baby nearly died. Lily did die. She was flatline for two minutes and thirty-eight –” Alistair didn’t get the opportunity to finish his grand statement because Nate surged out of his chair so fast, it flew on its wheels and shot across the room, slamming into the wall. “Mr. McAllister…” Alistair said warningly but Nate was coming swiftly around the table, coming at her. At this sight, Lily, too, jumped out of her chair in a panic, her numbness not that complete, and backed away in self-defence as Nate came at her, came at her with purposeful, long strides. She backed up jerkily, one hand behind her, one hand in front, retreating until she hit the wall. Before she knew what he was about, his hard chest came up against her hand, pushing it back and his body pressed against hers. Terrified and confused at this sudden change, she looked to the right and to the left, anywhere for escape, anywhere but at Nate. And to her shock, his hands caught her face, resting one on either side, gently trying to force her to look into his impossibly dark eyes. “I didn’t know,” he whispered and the absolute ache dripping from his first words said to her since she found out he was alive cut through her thin shield of numbness like a razor. She attempted to pull her face free but his hands tightened. “Lily, I didn’t know,” he repeated, and she caught his eyes and they were glittering dark with something that she couldn’t read, something hideously painful and she had to get away from it. Was desperate to get away from it. She needed to flee. She tried to look over his shoulder but he was too tall, too close. Things were happening in the room, there was urgent talk, maybe even a tussle. But all she could see was Nate.

Liquidation Value The liquidation value is what the company’s assets would bring at a forced sale. Normally the liquidation value of a going concern has little relevance since the value of an operating business is much greater than its liquidation value.

SHAREHOLDERS’ EQUITY has two components: CAPITAL STOCK: The original amount of money the owners contributed as their investment in the stock of the company. RETAINED EARNINGS: All the earnings of the company that have been retained, that is, not paid out as dividends to owners.

Read the notes.Never buy a stock without reading the footnotes to the financial statements in the annual report. Usually labeled “summary of significant accounting policies,” one key note describes how the company recognizes revenue, records inventories, treats installment or contract sales, expenses its marketing costs, and accounts for the other major aspects of its business.7 In the other footnotes, watch for disclosures about debt, stock options, loans to customers, reserves against losses, and other “risk factors” that can take a big chomp out of earnings

Someone driving a $100,000 car might be wealthy. But the only data point you have about their wealth is that they have $100,000 less than they did before they bought the car (or $100,000 more in debt). That’s all you know about them. We tend to judge wealth by what we see, because that’s the information we have in front of us. We can’t see people’s bank accounts or brokerage statements. So we rely on outward appearances to gauge financial success. Cars. Homes. Instagram photos. Modern capitalism makes helping people fake it until they make it a cherished industry.

Throw in the valley’s rich history of computer science breakthroughs, and you’ve set the stage for the geeky-hippie hybrid ideology that has long defined Silicon Valley. Central to that ideology is a wide-eyed techno-optimism, a belief that every person and company can truly change the world through innovative thinking. Copying ideas or product features is frowned upon as a betrayal of the zeitgeist and an act that is beneath the moral code of a true entrepreneur. It’s all about “pure” innovation, creating a totally original product that generates what Steve Jobs called a “dent in the universe.” Startups that grow up in this kind of environment tend to be mission-driven. They start with a novel idea or idealistic goal, and they build a company around that. Company mission statements are clean and lofty, detached from earthly concerns or financial motivations.

Taking wildly different positions on the value of assets and using his emotional state to justify those valuations helps explain something else Trump has done repeatedly. Congress requires all presidential candidates to file a financial disclosure statement listing their assets, liabilities, and income. Trump’s ninety-two-page disclosure report valued one of his best-known properties at more than $50 million. But he told tax authorities the same property was worth only about $1 million. He valued another signature Trump property at zero—and demanded the return of the property taxes he had already paid.

This shift in culture has changed us. In the first place, it has made us a bit more materialistic. College students now say they put more value on money and career success. Every year, researchers from UCLA survey a nationwide sample of college freshmen to gauge their values and what they want out of life. In 1966, 80 percent of freshmen said that they were strongly motivated to develop a meaningful philosophy of life. Today, less than half of them say that. In 1966, 42 percent said that becoming rich was an important life goal. By 1990, 74 percent agreed with that statement. Financial security, once seen as a middling value, is now tied as students’ top goal. In 1966, in other words, students felt it was important to at least present themselves as philosophical and meaning-driven people. By 1990, they no longer felt the need to present themselves that way. They felt it perfectly acceptable to say they were primarily interested in money.20 We live in a more individualistic society. If

Discounted Cash Flow The discounted cash flow method of valuation is the most sophisticated (and the most difficult) method to use in valuing the business. With this method you must estimate all the cash influxes to investors over time (dividends and ultimate stock sales) and then compute a “net present value” using an assumed discount rate (implied interest rate).

While you were in school, you got a report card once a quarter. A financial statement is your report card once you leave school. The problem is that since most people have not been trained to read financial statements or trained in how to keep a personal financial statement, they have no idea how they are doing once they leave school. Many people have failing marks on their personal financial statements but think they are doing well because they have a high-paying job and a nice home. Unfortunately, if I were handing out the grades, anyone who was not financially independent by age 45 would receive a failing grade. It is not that I want to be cruel. I just want people to wake up and maybe do a few things differently, before they run out of their most important asset—time.

George Muller, that remarkable man of such simple yet strong faith in God, a man of prayer and Bible reading, founder and promoter of the noted orphanage in England, which cared for hundreds of orphan children, conducted the institution solely by faith and prayer. He never asked a man for anything, but simply trusted in the Providence of God, and it is a notorious fact that never did the inmates of the home lack any good thing. From his paper he always excluded money matters, and financial difficulties found no place in it. Nor would he mention the sums which had been given him, nor the names of those who made contributions. He never spoke of his wants to others nor asked a donation. The story of his life and the history of this orphanage read like a chapter from the Scriptures. The secret of his success was found in this simple statement made by him: “I went to my God and prayed diligently, and received what I needed.” That was the simple course which he pursued. There was nothing he insisted on with greater earnestness than that, be the expenses what they might be, let them increase ever so suddenly, he must not beg for anything. There was nothing in which he took more delight and showed more earnestness in telling than that he had prayed for every want which ever came to him in his great work. His was a work of continuous and most importunate praying, and he always confidently claimed that God had guided him throughout it all. A stronger proof of a divine providence, and of the power of simple faith and of answered prayer, cannot be found in Church history or religious biography.

Our internal boundaries define and contain the unique personal characteristics of our thoughts, feelings, opinions, behaviors, beliefs, and spirituality. Boundaries help us recognize, honor, and respect our individual wants, needs, and desires. They help us define our separateness and give us safety in our intimate communications with others. If someone verbally attacks us, we maintain our internal boundary and practice self-containment by moderately expressing our thoughts and feelings about their behavior using “I” statements. Or, we may choose not to respond and silently remind ourselves that how another person acts is about that person, not about us. If someone confronts us about our behavior, we use our internal boundary to listen to what they say. We do not internalize what is said before deciding if any of it rings true for us. If we have wronged the other person, we make amends. In either situation our self-worth is not diminished because we have maintained our internal boundaries. 110:2 We use internal boundaries in various ways. An example is deciding how much personal information, such as personal history or financial information, to share with others. Conversely, we refrain from delving into others’ personal business. We might really want to ask a question or say something to someone, yet we do not because we know that person’s private life is none of our business. 111:1 When we have healthy internal boundary systems, we recognize that each individual is responsible for his or her emotional, mental, and spiritual boundaries. We allow ourselves and others to have their own thoughts, feelings, opinions, behaviors, beliefs, and spirituality. With functional boundaries we are able to meet our needs without infringing on others’ abilities to meet their needs. Our internal boundaries can be flexible and we decide what is safe and comfortable for ourselves.

For generations the official U.S. policy had been to support these regimes against any threat from their own citizens, who were branded automatically as Communists. When necessary, U.S. troops had been deployed in Latin America for decades to defend our military allies, many of whom were graduates of the U.S. Military Academy, spoke English, and sent their children to be educated in our country. They were often involved in lucrative trade agreements involving pineapples, bananas, bauxite, copper and iron ore, and other valuable commodities. When I became president, military juntas ruled in Argentina, Bolivia, Brazil, Chile, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Nicaragua, Panama, Paraguay, Peru, and Uruguay. I decided to support peaceful moves toward freedom and democracy throughout the hemisphere. In addition, our government used its influence through public statements and our votes in financial institutions to put special pressure on the regimes that were most abusive to their own people, including Chile, Argentina, Paraguay, Nicaragua, and El Salvador. On visits to the region Rosalynn and I met with religious and other leaders who were seeking political change through peaceful means, and we refused requests from dictators to defend their regimes from armed revolutionaries, most of whom were poor, indigenous Indians or descendants of former African slaves. Within ten years all the Latin American countries I named here had become democracies, and The Carter Center had observed early elections in Panama, Nicaragua, Peru, Haiti, and Paraguay.

As the scholar of English literature Marty Roth notes, while modern writers from Eugene O’Neill to Hemingway have explicitly denied the role of alcohol in their art, “this disclaimer, when it comes from a heavy drinker, is more likely to be part of an alcoholic alibi system than a statement of fact.”14 In any case, it is impossible to ignore the fact that an inordinate proportion of writers, poets, artists, and musicians are also heavy users of liquid inspiration, willing to put up with the physical and sometimes financial and personal costs in return for an unleashed mind.

But that Friday of the beam meeting, a check in the amount of £5,000 mysteriously, and conveniently, turned up in his Lloyds account. The name on the deposited check was that of Brendan Bracken, Churchill’s parliamentary private secretary, but the true source was Bracken’s wealthy co-owner of the Economist magazine, Sir Henry Strakosch. Three days earlier, upon receiving a statement from Lloyds listing his overdraft, Churchill had called Bracken to his office. He was fed up with the distraction and pressure caused by his financial troubles and had far more important matters to confront. He told Bracken to fix the situation, and Bracken did.

The last statement reveals more than may appear at first glance: it indicates that Greenspan's mistake was to expect that the lending institutions' enlightened self-interest would make them act more responsibly, more ethically, in order to avoid short-term self-propelling cycles of wild speculation which, sooner or later, burst like a bubble. In other words, his mistake concerned not the facts, the objective economic data or mechanisms; it concerned rather the ethical attitudes generated by market speculation—in particular the premise that market processes will spontaneously generate responsibility and trust, since it is in the long-term self-interest of the participants themselves to act thusly. Clearly, Greenspan's error was not only and not simply one of overestimating the rationality of market agents—that is, their ability to resist the temptation of making wild speculative gains. What he forgot to include in the equation was the financial speculators' quite rational expectation that the risks would be worth taking, since, in the event of a financial collapse, they could count on the state to cover their losses.

Jobs and Wozniak had no personal assets, but Wayne (who worried about a global financial Armageddon) kept gold coins hidden in his mattress. Because they had structured Apple as a simple partnership rather than a corporation, the partners would be personally liable for the debts, and Wayne was afraid potential creditors would go after him. So he returned to the Santa Clara County office just eleven days later with a “statement of withdrawal” and an amendment to the partnership agreement. “By virtue of a re-assessment of understandings by and between all parties,” it began, “Wayne shall hereinafter cease to function in the status of ‘Partner.’” It noted that in payment for his 10% of the company, he received $800, and shortly afterward $1,500 more. Had he stayed on and kept his 10% stake, at the end of 2012 it would have been worth approximately $54 billion. Instead he was then living alone in a small home in Pahrump, Nevada, where he played the penny slot machines and lived off his social security check. He later claimed he had no regrets. “I made the best decision for me at the time. Both of them were real whirlwinds, and I knew my stomach and it wasn’t ready for such a ride.

So-called “battered women’s shelters” have been called “one-stop divorce shops” because they are “extreme militant feminist” operations that exist mostly to separate children from their fathers, even without any demonstration of violence. Erin Pizzey, who founded the first shelter in London in 1971, claims that her movement has been “hijacked” by feminists. Extended investigations by Canada’s National Post and others revealed a violently anti-male agenda, corruption, drug and alcohol use, child abuse, and even, ironically, violence against women. Yet they continue to receive government funding. One woman whose husband “didn’t beat me up or nothing, we just had an argument,” says shelter workers ignored her pleas and pressured her to leave her marriage. “They asked me if I was abused, and I said, ‘No.’ They wanted me to get a lawyer, and I said, ‘For what?’” She maintains shelter employees tried to “trick” her into making incriminating statements about her husband. “Everything negative about him, they wrote it down. If I said something nice about him, they wouldn’t write it down. I kept telling them, ‘No, he didn’t hit me.’” She was offered financial incentives to leave her husband. “They said, ‘If you leave him, we can help you find a place right away.’ But I said, ‘I don’t want to leave him.’ . . . They wanted that so bad. They were trying to break up a family, and I didn’t want that.

While David runs the financial end of the Rockefeller dynasty, Nelson runs the political. Nelson would like to be President of the United States. But, unfortunately for him, he is unacceptable to the vast majority of the grass roots of his own party. The next best thing to being President is controlling a President. Nelson Rockefeller and Richard Nixon are supposed to be bitter political competitors. In a sense they are, but that still does not preclude Rockefeller from asserting dominion over Mr. Nixon. When Mr. Nixon and Mr. Rockefeller competed for the Republican nomination in 1968, Rockefeller naturally would have preferred to win the prize, but regardless of who won, he would control the highest office in the land. You will recall that right in the middle of drawing up the Republican platform in 1960, Mr. Nixon suddenly left Chicago and flew to New York to meet with Nelson Rockefeller in what Barry Goldwater described as the "Munich of the Republican Party." There was no political reason why Mr. Nixon needed to crawl to Mr. Rockefeller. He had the convention all sewed up. The Chicago Tribune cracked that it was like Grant surrendering to Lee. In The Making of the President, 1960, Theodore White noted that Nixon accepted all the Rockefeller terms for this meeting, including provisions "that Nixon telephone Rockefeller personally with his request for a meeting; that they meet at the Rockefeller apartment…that their meeting be secret and later be announced in a press release from the Governor, not Nixon; that the meeting be clearly announced as taking place at the Vice President's request; that the statement of policy issuing from it be long, detailed, inclusive, not a summary communiqué." The meeting produced the infamous "Compact of Fifth Avenue" in which the Republican Platform was scrapped and replaced by Rockefeller's socialist plans. The Wall Street Journal of July 25, 1960, commented: "…a little band of conservatives within the party…are shoved to the sidelines… [T]he fourteen points are very liberal indeed; they comprise a platform akin in many ways to the Democratic platform and they are a far cry from the things that conservative men think the Republican Party ought to stand for…" As Theodore White put it: "Never had the quadrennial liberal swoop of the regulars been more nakedly dramatized than by the open compact of Fifth Avenue. Whatever honor they might have been able to carry from their services on the platform committee had been wiped out. A single night's meeting of the two men in a millionaire's triplex apartment in Babylon-by-the-Hudson, eight hundred and thirty miles away, was about to overrule them; they were exposed as clowns for all the world to see." The whole story behind what happened in Rockefeller's apartment will doubtless never be known. We can only make an educated guess in light of subsequent events. But it is obvious that since that time Mr. Nixon has been in the Rockefeller orbit.

Continetti concludes: "An intellectual, financial, technological, and social infrastructure to undermine global capitalism has been developing for more than two decades, and we are in the middle of its latest manifestation… The occupiers’ tent cities are self-governing, communal, egalitarian, and networked. They reject everyday politics. They foster bohemianism and confrontation with the civil authorities. They are the Phalanx and New Harmony, updated for postmodern times and plopped in the middle of our cities. There may not be that many activists in the camps. They may appear silly, even grotesque. They may resist "agendas" and "policies." They may not agree on what they want or when they want it. And they may disappear as winter arrives and the liberals whose parks they are occupying lose patience with them. But the utopians and anarchists will reappear… The occupation will persist as long as individuals believe that inequalities of property are unjust and that the brotherhood of man can be established on earth." You can see why anarchists might find this sort of thing refreshingly honest. The author makes no secret of his desire to see us all in prison, but at least he’s willing to make an honest assessment of what the stakes are. Still, there is one screamingly dishonest theme that runs throughout the Weekly Standard piece: the intentional conflation of "democracy" with "everyday politics," that is, lobbying, fund-raising, working for electoral campaigns, and otherwise participating in the current American political system. The premise is that the author stands in favor of democracy, and that occupiers, in rejecting the existing system, are against it. In fact, the conservative tradition that produced and sustains journals like The Weekly Stand is profoundly antidemocratic. Its heroes, from Plato to Edmund Burke, are, almost uniformly, men who opposed democracy on principle, and its readers are still fond of statements like "America is not a democracy, it’s a republic." What’s more, the sort of arguments Continetti breaks out here--that anarchist-inspire movements are unstable, confused, threaten established orders of property, and must necessarily lead to violence--are precisely the arguments that have, for centuries. been leveled by conservatives against democracy itself. In reality, OWS is anarchist-inspired, but for precisely that reason it stands squarely in the very tradition of American popular democracy that conservatives like Continetti have always staunchly opposed. Anarchism does not mean the negation of democracy--or at least, any of the aspects of democracy that most American have historically liked. Rather, anarchism is a matter of taking those core democratic principles to their logical conclusions. The reason it’s difficult to see this is because the word "democracy" has had such an endlessly contested history: so much so that most American pundits and politicians, for instance, now use the term to refer to a form of government established with the explicit purpose of ensuring what John Adams once called "the horrors of democracy" would never come about. (p. 153-154)

Some of the world’s biggest banks and investor groups have swung behind a pledge to raise $200bn by the end of next year to combat climate change. In a move the UN said was unprecedented, leading insurers, pension funds and banks have joined forces to help channel the money to projects that will help poorer countries deal with the effect of global warming and cut reliance on fossil fuels. The announcement came at the start of a UN climate summit in New York aimed at bolstering momentum for a global agreement to lower planet-warming greenhouse gas emissions due to be signed in Paris at the end of 2015. “Change is in the air,” said UN secretary-general, Ban Ki-moon. “Today’s climate summit has shown an entirely new, co-operative global approach to climate change.” The summit opened with business and government pledges to make cities greener, create a renewable energy “corridor” in Africa and rein in the clearing of forests for palm oil plantations. The private sector’s contributions marked a “major departure” from past climate summits, the UN said, adding in a statement that financial groups “had never previously acted together on climate change at such a large scale”. One obstacle to the Paris agreement is developing countries’ insistence that richer nations must fulfil pledges made nearly five years ago to raise $100bn a year by 2020 for climate action.

A sheet of paper has the words “The statement on the other side of this paper is true” written on one side and “The statement on the other side of this paper is false” on the reverse. The conflict isn’t resolvable. Or, closer to the point, the following assertion: “This statement is unprovable.” 5 You cannot prove the statement is true, because doing so would contradict it. If you prove the statement is false, then that means its converse is true—it is provable—which again is a contradiction.

Many philosophers have made the statement, that man is the master of his own earthly destiny, but most of them have failed to say why he is the master. The reason that man may be the master of his own earthly status, and especially his financial status, is thoroughly explained in this chapter. Man may become the master of himself, and of his environment, because he has the POWER TO INFLUENCE HIS OWN SUBCONSCIOUS MIND, and through it, gain the cooperation of Infinite Intelligence.

An obvious step to working the Debt Snowball is to stop borrowing. Otherwise, you will just be changing the names of the creditors on your debt list. So you must draw a line in the sand and say, “I will never borrow again.” As soon as you make that statement, there will be a test. Trust me. Your transmission will go out. Your kid will need braces. It is almost as if God wants to see if you are really gazelle-intense. At this point, you are ready for a plastectomy—plastic surgery to cut up your credit cards. I’m often asked, “Dave, should I cut my cards up now or when I pay them off?” Cut them up NOW. A permanent change in your view of debt is your only chance. No matter what happens, you have to pursue the opportunity or solve the challenge without debt. It has to stop. If you think you can get out of debt without huge resolve to stop borrowing, you are wrong. You can’t get out of a hole by digging out the bottom.

time. The trial balance is typically prepared at the end of a period, prior to preparing the primary financial statements. The purpose of the trial balance is to check that debits—in total—are equal to the total amount of credits. If debits do not equal credits, you know that an erroneous journal entry must have been posted. While a trial balance is a helpful check, it’s far from perfect, as there are numerous types of errors that a trial balance doesn’t catch. (For example, a trial balance wouldn’t alert you if the wrong asset account had been debited for a given transaction, as the error wouldn’t throw off the total amount of debits.) Chapter 8 Simple Summary For every transaction, a journal entry must be recorded that includes both a debit and a credit. Debits

the goal of GAAP is to ensure that companies’ financial statements are prepared using a consistent set of rules and assumptions so that they can be compared to those of another company in a meaningful way.

Financial Statement

Tax-Deferred does not mean Tax-Free It never ceases to amaze me when I meet with people who do not know that tax-deferred does not mean tax-free. You mean I have to pay taxes when I take this money!? This is not all mine!? These are common remarks I hear as we are looking at their most recent retirement account statement. Somehow this consideration was missed when they enrolled in the savings plan and each year when they postponed the tax when filing their tax return. I am not a tax professional but I can understand how an accountant or tax preparer wouldn’t think to make sure the client understands that they are postponing taxes and the tax calculation during their working years. I met an accountant that expressed how difficult it is when he gets the client that believed they were ready to leave work only to find out that because of taxes they are coming up a little or a lot short. This happened to one of my relatives that worked at least 30 years as an x-ray technician and then supervisor at a very large hospital. While working, they always had the nice houses, the nice cars, and a nice upper-middle class lifestyle, nothing fancy. After he retired and even though his wife still worked as a school principal, he had to take a sales clerk job at a nearby liquor store so that his family could maintain their lifestyle. I will never forget other relatives joking and laughing about him miscalculating his retirement. I’m certain that his unsuccessful retirement and that of other relatives influenced my interest in retirement planning if for no one else but me. With a limited amount of retirement income, most retirees would prefer to keep their dollars rather than give them to Uncle Sam. Even those with an unlimited source of funds don’t want to pay more taxes than necessary. Fortunately, there are some ways to decrease your tax burden once you’ve done the obvious work of ensuring you’ve taken all the deductions and credits to which you’re entitled when you file your taxes.

Along with the other items presented in the budget document, the finance minister submits the Annual Financial Statement which consists of estimated receipts and spending, which are operated through three separate accounts: (i) the Consolidated Fund, (ii) the Contingency Fund, and (iii) the Public Account.

To become financially secure, a person needs to mind their own business. Your business revolves around your asset column, not your income column. As stated earlier, the number-one rule is to know the difference between an asset and a liability, and to buy assets. The rich focus on their asset columns, while everyone else focuses on their income statements.

From this standpoint, the best kind of financial statement is not one that represents the corporation's condition most fully and most fairly, but rather one that produces the highest possible credit rating (see Chapter 13) and price-earnings multiple (see Chapter 14).

Suppose that, in the last few weeks of a quarter, earnings threaten to fall short of the programmed year-over-year increase. The corporation simply borrows sales (and associated profits) from the next quarter by offering customers special discounts to place orders earlier than they had planned.

Stevenson and Sparkman were candidates for august offices, Nixon said. They needed to “come before the American people as I have and make a complete financial statement as to their financial history,” he said. “And if they don’t, it will be an admission that they have something to hide.” There

growing, and sustainable. We’ve also explored how a company

Wishing will not bring riches. But desiring riches with a state of mind that becomes an obsession, then planning definite ways and means to acquire riches, and backing those plans with persistence which does not recognise failure, will bring riches. The method by which desire for riches can be transmuted into its financial equivalent consists of six definite, practical steps: 1. Fix in your mind the exact amount of money you desire. It is not sufficient merely to say, ‘I want plenty of money.’ Be definite as to the amount. (There is a psychological reason for definiteness which will be described in a subsequent chapter.) 2. Determine exactly what you intend to give in return for the money you desire. (There is no such reality as ‘something for nothing’.) 3. Establish a definite date when you intend to possess the money you desire. 4. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action. 5. Write out a clear, concise statement of the amount of money you intend to acquire. Name the time limit for its acquisition. State what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it. 6. Read your written statement aloud, twice daily, once just before retiring at night, and once after rising in the morning. AS YOU READ, SEE AND FEEL AND BELIEVE YOURSELF ALREADY IN POSSESSION OF THE MONEY.

Warren Buffett invests according to four simple principles. Vigilant leadership Long-term prospects Stock stability Buy at attractive prices. One of the greatest strengths of Warren Buffett is his ability to make things simple. As you can see above, his principles are straightforward and easy to remember. As you navigate your way through this book, always keep these four principles at the forefront of your mind. Ensuring that all four are met at all times is paramount to anything else.

Kim and I own several thousand cash-flowing apartment properties, commercial properties, a luxury hotel, a boutique hotel, five golf courses, and oil wells. Every year we add more assets like those to our financial statement and pay less in taxes.

at least in IBM’s case, when it honored and nurtured its sales force and its sales culture, it was productive and successful. That statement may sound incredibly obvious. When their values prevailed, IBM did well. But beginning shortly after the new millennium, they did not always prevail. IBM, like many other corporations, in recent years has relied increasingly on what came to be known as “financial engineering” to improve performance. It was never enough to ensure success.

Rule 1—Low debt Rule 2—High current ratio Rule 3—Strong and consistent return on equity Rule 4—Appropriate management incentives.

Financial statements are my novels, I am a Chartered Accountant.

At its August 7, 2007, meeting, the FOMC had concluded that 'although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected.' How's that going?, many of us thought when we read the statement. The predominant concern is inflation? Many Fed watchers blinked in disbelief. What were those guys thinking?

The careful investor, when he hears such tales, should ask a key question: At what price is this company a good buy? What price is too high? Suppose, after doing your analysis of the company’s financial statements, management, business model, and prospects, you conclude that it’s worth buying at $40 a share, at which price you expect not only a satisfactory excess risk-adjusted return but have a margin of safety in case your analysis is flawed. Suppose you also conclude that the expected return at $80 is substandard, so the stock is likely overpriced. Typically you’ll avoid investing in stocks when they are trading above your buy price but, if you follow many companies carefully, from time to time some will be attractive purchases. The range between your “buy” price and the “likely overpriced” level, in this case from $40 to $80, is likely to be narrower for better, more experienced investors, enabling them to participate in more situations and with greater confidence.

Current assets are also referred to as the “working assets” of the business because they are in the cycle of cash going to buy inventory; Inventory is then sold to vendors and becomes Accounts Receivable. Accounts Receivable, when collected from the vendors, then turns back into Cash. Cash → Inventory → Accounts Receivable → Cash. This cycle repeats itself over and over again, and it is how a business makes money.

Vigilant leadership Long-term prospects Stock stability Buy at attractive prices.

The question is really not how much they make, but how much they spend.

the difference between interest rates creates a disparity between price and value. This disparity is where an investor makes money—especially in the stock market

Many financial analysts will find Emerson and Emery more interesting and appealing stocks than the other two—primarily, perhaps, because of their better “market action,” and secondarily because of their faster recent growth in earnings. Under our principles of conservative investment the first is not a valid reason for selection—that is something for the speculators to play around with. The second has validity, but within limits. Can the past growth and the presumably good prospects of Emery Air Freight justify a price more than 60 times its recent earnings?1 Our answer would be: Maybe for someone who has made an in-depth study of the possibilities of this company and come up with exceptionally firm and optimistic conclusions. But not for the careful investor who wants to be reasonably sure in advance that he is not committing the typical Wall Street error of overenthusiasm for good performance in earnings and in the stock market.* The same cautionary statements seem called for in the case of Emerson Electric, with a special reference to the market’s current valuation of over a billion dollars for the intangible, or earning-power, factor here. We should add that the “electronics industry,” once a fair-haired child of the stock market, has in general fallen on disastrous days. Emerson is an outstanding exception, but it will have to continue to be such an exception for a great many years in the future before the 1970 closing price will have been fully justified by its subsequent performance. By contrast, both ELTRA at 27 and Emhart at 33 have the earmarks of companies with sufficient value behind their price to constitute reasonably protected investments. Here the investor can, if he wishes, consider himself basically a part owner of these businesses, at a cost corresponding to what the

Read the notes.Never buy a stock without reading the footnotes to the financial statements in the annual report. Usually labeled “summary of significant accounting policies,” one key note describes how the company recognizes revenue, records inventories, treats installment or contract sales, expenses its marketing costs, and accounts for the other major aspects of its business.7 In the other footnotes, watch for disclosures about debt, stock options, loans to customers, reserves against losses, and other “risk factors” that can take a big chomp out of earnings. Among the things that should make your antennae twitch are technical terms like “capitalized,” “deferred,” and “restructuring”—and plain-English words signaling that the company has altered its accounting practices, like “began,” “change,” and “however.” None of those words mean you should not buy the stock, but all mean that you need to investigate further. Be sure to compare the footnotes with those in the financial statements of at least one firm that’s a close competitor, to see how aggressive your company’s accountants are. Read more. If you are an enterprising investor willing to put plenty of time and energy into your portfolio, then you owe it to yourself to learn more about financial reporting. That’s the only way to minimize your odds of being misled by a shifty earnings statement. Three solid books full of timely and specific examples are Martin Fridson and Fernando Alvarez’s Financial Statement Analysis, Charles Mulford and Eugene Comiskey’s The Financial Numbers Game, and Howard Schilit’s Financial Shenanigans. 8

money—not how much money we have.

the financial statements, rather than being a driver or goal of the business creation process, become simply the by-product of clear and disciplined strategic thinking. Analogs, antilogs, the leaps of faith that follow from them, and the well thought out dashboards that measure the outcomes of the hypothesis tests are what make this process happen. And the business model that results—a revenue model, gross margin model, and all the rest—is the output of the process.

Pharaoh’s final effort to bring Moses and Israel into compromise is found in his statement, “Go, serve the LORD; only let your flocks and your herds be kept back” (Exodus 10:24, NKJV). This statement reveals the ultimate test and potentially the ultimate place of blessing from God. It is to worship God with all of our financial resources [...]

If a company did not own a majority of a subsidiary’s shares, it didn’t make sense to “consolidate” that subsidiary by reporting all of its assets and liabilities. Berning treated International Match’s minority stakes in other companies as investments in special purpose entities, which could be excluded from International Match’s financial statements. Why would International Match consolidate the debts of a minority investment? If it bought some shares of RCA, would it need to include RCA’s debts as well? No, Berning said. Such debts were deemed to be off the balance sheet. Durant was conflicted about the new preferred issue they were planning. Ivar’s financial statements were sloppy and incomplete. Yet investors nevertheless clamored to buy securities of International Match.

We can now see how the expansion of blockspace is on track to give us a cryptographically verifiable macrohistory, or cryptohistory for short. This is the log of everything that billions of people choose to make public: every decentralized tweet, every public donation, every birth and death certificate, every marriage and citizenship record, every crypto domain registration, every merger and acquisition of an on-chain entity, every financial statement, every public record — all digitally signed, timestamped, and hashed in freely available public ledgers.26 The thing is, essentially all of human behavior has a digital component now. Every purchase and communication, every ride in an Uber, every swipe of a keycard, and every step with a Fitbit — all of that produces digital artifacts. So, in theory you could eventually download the public blockchain of a network state to replay the entire cryptographically verified history of a community.25 That’s the future of public records, a concept that is to the paper-based system of the legacy state what paper records were to oral records.

For each year, our analysts looked at assets comprising about 90 percent of the total asset value that Trump had referenced in his financial statements. The overvaluations cut across virtually all his assets, and meant that he had reported asset values that, on average, were about double what they were actually worth.

of business. It is one reason why so many small companies fail in their first year. They simply run out of cash. CASH WITHOUT PROFIT But now let’s look at another sort of profit/cash disparity. Fine Apparel is another start-up. It sells expensive men’s clothing, and it’s located in a part of town frequented by businessmen and well-to-do tourists. Its sales for the first three months are $50,000, $75,000, and $95,000—again, a healthy growth trend. Its cost of goods sold is 70 percent of sales, and its monthly operating expenses are $30,000 (high rent!). For the sake of comparison, we’ll say it too begins the period with $10,000 in the bank. So Fine Apparel’s income statement for these months looks like this: It hasn’t yet turned the corner on profitability, though it is losing less

On the other hand, performing a real audit of International Match was impossible. How could Berning know whether the Swedish numbers really were accurate? How could he protect American investors from inaccuracies in the financial statements? In this way, too, his job was like that of a sorter and packager of matches. How could anyone ensure that every match would be safe or free from defects? Without extraordinary effort, it simply could not be done. From his vantage point at Ernst & Ernst in New York, Berning could not even assess the size of the iceberg growing out from under International Match, much less its specific composition or the dangers it might pose.

But International Match’s financial statements contained a second, more fundamental, warning. If International Match did not exist before 1923, how could it have had income during 1922 and 1921? Perhaps Ivar had included income from some predecessor companies. Perhaps the numbers were from American Kreuger & Toll, the failed effort led by Anders Jordahl that had focused more on being close to Broadway theaters than on negotiations with the American match industry. Investors could not tell which of Ivar’s other companies might have been responsible for International Match’s alleged income. Instead, they were led to believe that International Match had consistently been making money since 1921, more than a year before Ivar had sailed to New York to meet Donald Durant. Anyone who checked the dates would have known those numbers were wrong.

According to Ripley, the sketchy disclosures by International Match continued to be typical of those by leading companies. National Biscuit Company’s income statement from 1925 was just three-by-four inches, and didn’t need even that much space – it included just a single entry labeled “Earnings, Year 1925”.11 The Royal Baking Powder Company didn’t issue any financial statements at all.12 Many corporate reports contained disclaimers that the official income account “does not by any means give a clear picture of the annual earning power” or that “the balance sheet by no means discloses the true value of the company’s fixed assets.

2. Going Concern Unless there is evidence to the contrary, accountants assume that the life of the business entity is infinitely long. Obviously this assumption cannot be verified and is hardly ever true. But this assumption does greatly simplify the presentation of the financial position of the firm and aids in the preparation of financial statements.

I made two public statements myself that week in support of the GSEs.

Ivar tried dangling a carrot in front of his auditor. He invited the Bernings to sail with him from Canada to the Far East, all expenses paid. It had become obvious to Ivar that Berning was jealous of his international travels. Mrs Berning also coveted the trips her husband told her about, especially Ivar’s time in five-star hotels, restaurants, and luxury cruise cabins. She was delighted by Ivar’s invitation and the couple eagerly accepted. The next month, when Berning gently reminded Ivar that the Wisconsin regulators had not gone away, Ivar suggested that they simply send them updated versions of the financial statements with no additional detail. Berning agreed, even though it was obvious that Wisconsin wanted more.

Few people seemed to care that the information was incomplete. Indeed, International Match’s cursory financial statements were typical of corporate disclosure at the time. Even companies with securities listed on the New York Stock Exchange gave up scant detail. Fewer than one-third of Stock Exchange companies published quarterly reports, and those reports were brief. Another third of Stock Exchange companies didn’t publish any reports at all. There was even less disclosure from companies, such as International Match, with shares traded on the Curb Exchange.21 Anyone who wanted to invest in those companies did so in the dark, or not at all.

But neither of those statements was true.

But Commissioner Hibma didn’t like being ignored, and Berning soon notified Ivar that Hibma was requesting even more information: The latest request comes from Wisconsin, for detailed statement of expenses for 1921 and 1922 for all constituent Companies, together with their consolidated balance sheet at December 31, 1922. I am today writing them again, trying to appease them. They have already requested, and will undoubtedly do so again, a detailed statement of consolidated earnings, surplus and balance sheets of the constituent Companies for 1923. However, we can discuss this with you when you arrive here, and can then determine the best way to accommodate them.8

By this time, Ivar and Berning had developed a much cozier relationship. Ivar had given up on getting Berning’s first name right, but at least he addressed letters with an honorific now, as in “My dear Mr Berning.”27 Berning had gotten over the scrubbed trip to Japan, and instead was focused on an upcoming trip to Europe with his wife, at Ivar’s expense. He wrote that “Mrs Berning and I are looking forward with a great deal of anticipation to our visit to Sweden.”28 A.D. Berning’s responses to detailed inquiries from Durant ranged from murky to non-responsive. What, Durant wanted to know, did International Match’s income statement entry of $4,318,827.84 for “income from other sources” represent? Berning cryptically answered that the “other sources” entry “represents all the income of the corporation other than from sales. It includes dividends and interest received on investments, interest received on advances, accounts receivable, etc., profit on exchange and other miscellaneous items.”29 Whatever that meant, it could not have inspired much confidence.

Depreciation is the method accountants use to allocate the cost of equipment and other assets to the total cost of products and services as shown on the income statement. It is based on the same idea as accruals: we want to match as closely as possible the costs of our products and services with what was sold. Most capital investments other than land are depreciated. Accountants attempt to spread the cost of the expenditure over the useful life of the item. There’s more about depreciation in parts 2 and 3.

Convert your net income from operating activities to net cash (flows): The cash flow statement also helps in converting the earnings from operating activities to cash.

Do not be quick to pay your supplier before your customers pay for their goods.

There are three key financial statements that are made up of 5 main elements. These elements include: 1. Assets: Assets are items of value that are owned by the company. Items that can be listed under assets include cash, equipment, real estate, etc. 2. Liabilities: These are items that decrease the net worth of the business. In other words, liabilities are what the company owes other companies, individuals, or investors. Liabilities include items such as accounts payable, long term and short term loans, etc. 3. Equities: These refer to cash or cash equivalents that are used to represent the ownership of the company. The term equity, as used in accounting, determines the value of the company and its ownership. 4. Revenues: Revenue is one component of financial statements that mainly appears on the income sheet and the cash flow statement. Revenue represents all the money that is earned by a business over a given trading period. The revenue of a business can vary from one accounting period to another. The revenue of a business determines the net income of business after expenses have subtracted. 5. Expenses: The expenses of a business are usually used in preparing the income sheet and the cash flow statement. Expenses represent the ways a company uses its funds. Among the expenses include direct expenses such as the cost of goods sold and indirect expenses such as rent and taxes.

Prepaid expenses are expenditures that have already been made for benefits that the company will receive in the near future. Examples of prepaid expenses are advances for insurance policies, rent, and taxes. Prepaid expenses are classified as current assets, not because they can be turned into cash, but because if they had not been prepaid, that cash would have to be spent within 12 months. Some prepaid expenses also result in cost savings, such as paying insurance premiums annually instead of monthly.