Alice Schroeder: How Warren Buffett Really Makes His Investment Decisions

Mariusz Skonieczny: The Basics of Understanding Financial Statements

A friend of mine, Mariusz Skonieczny, recently wrote a book, The Basics of Understanding Financial Statements, which I think is a good introductory book to help beginners in understanding financial statements.

As Skonieczny put it, “Many people choose to invest their entire life savings into stocks, yet they do not take the time to learn basic accounting, which is the language of business.”

“Managers of various companies communicate with shareholders about the successes and failures of their business endeavors through financial statements which include the balance sheet, the income statement, and the cash flow statement. The preparation of financial statements is guided by various accounting guidelines. When buyers and sellers of stocks are truly involved in buying and selling businesses, it is critical that they know how to read and understand financial statements so that they know what it is that they are buying or selling.”

If you are interested in the book, please visit: Classic Value Investors website and become a subscriber of his blog. You will get the book for free!

Happy learning,

David

Forbes on Warren Buffett: A Great Compilation

Please download here.