A Study in Statements

By Holly Zhang

A Study in Statements: Financial Statements is an introductory book on financial statements. Each section delves into one of the three financial statements. There are a multitude of practice questions, drawing upon the annual and quarterly reports of companies to help you see the prominent applications of financial statements. It is recommended this book be used in conjunction with the online course Financial Statements Explained, which can be found on Udemy.

• The objectives of this book are as follow:
• Explain the three financial statements
• Understand financial and accounting regulations
• Analyze the 10-Ks and 10-Qs of companies
• Know the main types of financial ratios

• Language: English
• Publisher: Holly Zhang
• Release date: Dec 30, 2023
• ISBN: 9798223222095

Holly Zhang

Holly is a high school student with a background in financial analysis. On Udemy, she has created an online course called Financial Statements Explained and has amassed over 300 students globally. She has worked with companies like Mastercard Foundation and Equifax in democratizing financial literacy and won in multiple business case competitions at the national and international level. She is currently teaching alongside CPAs at her local library. As someone with a passion for simplification, Holly hopes to design courses enjoyable for everyone, regardless of the level at which they are.

Book preview

About the Author

HOLLY IS A HIGH SCHOOL student with a background in financial analysis. On Udemy, she has created an online course called Financial Statements Explained and has amassed over 300 students globally. She has worked with companies like Mastercard Foundation and Equifax in democratizing financial literacy and won in multiple business case competitions at the national and international level. She is currently teaching alongside CPAs at her local library. As someone with a passion for simplification, Holly hopes to design courses enjoyable for everyone, regardless of the level at which they are.

Dedication

TO MY MOM, FOR TEACHING me the beauty in banality.

Preface

DEAR READER,

I hope you enjoy this book as much as I enjoyed writing it. I originally wrote it with the intention of making it a supplementary resource to my online course Financial Statements Explained, but figured that having a written copy of the course will be useful for students. So, even though this is intended to be a workbook with many, many exercises, you will find that each chapter comes with a detailed discussion of concepts I further elaborate on in my course. This book also contains many snapshots of company financial statements. Some of the numbers may be hard to read because of the EPUB format. I encourage you to look them up yourself (all of the financial statements referenced in this book can be retrieved from SEC's EDGAR). Remember, the goal is not to just memorize these statements, but to understand the story they tell about a business. Happy learning, and I look forward to your feedback!

Sincerely,

Holly

P.S. If you would like a PDF version, please contact me at [e-mail].

Table of Contents

Introduction

On Financial Statements

On Accounting Standards

On Balance Sheets

On Income Statements

On Cash Flow Statements

On Financial Ratios

The Book

THIS BOOK IS BROKEN down to eight sections, including this one. We discuss financial statements in general, followed by a review of the accounting standards we follow, and in depth explanations and examples of the three types: the balance sheet, income statement, and cash flow statement. Lastly, we discuss financial ratios, all of which will be applied retroactively to the statements learned.

Every chapter contains a diverse number of exercises and case studies, which students are encouraged to complete. The answer key of this book will be released in a separate Kindle edition.

The financial statements used in this book are all taken from real life, publicly traded companies. For the sake of consistency, we will use the financial statements of large market capitalization companies like Apple and Amazon. All statements can be retrieved from the SEC’s EDGAR database.

Introduction

Finance vs. Accounting

OFTENTIMES, PEOPLE will conflate the two terms finance and accounting. While both disciplines are often used in conjunction for the broader business, they have a key difference that should be highlighted: time.

Accounting, as you may hear from your accounting teacher, is the language of business. This is true. Accounting is the process of reporting financial information to users. It