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.”
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