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Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports

SKU: 9781632652072
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Simply the clearest and most comprehensive introduction to financial reporting available. No accounting background is required.

“Finally, a handbook that takes the mystery out of accounting principles.” —Margi Gandolfi, VP Marketing/Strategic Planning of New York Blood Center

This edition replaces all previous editions of this bestselling title based on the revised and expanded edition corrected and back to the basics.

Financial Statements is a perfect introduction to financial accounting for non-financial managers, investors, business students, lawyers, lenders, entrepreneurs, and more. Financial Statements deftly shows that all this accounting and financial-reporting stuff is not rocket science and that anyone can understand it!

Ittelson empowers non-financial managers by clearly and simply demonstrating how the balance sheet, income statement, and cash flow statement work together to offer a snapshot of any company’s financial health. Every term is defined in simple, understandable language. Every concept is explained with a basic, straightforward transaction example. And with the book’s uniquely visual approach, you’ll be able to see exactly how each transaction affects the three key financial statements of the enterprise. Each statement paints a different and essential picture—the “three-legged stool” of company reporting:

  • The income statement shows the manufacturing (or service offerings) and selling actions of the company that result in profit or loss during a period. It gives a very important perspective on the company’s performance, its profitability.
  • The cash flow statement details cash into and out of the company for a period. You need money to make money. Running out of cash is bad. Duh.
  • The balance sheet records at the end of a period, an instant in time, what the company owns and what it owes, including the owners’ stake, called shareholders’ equity.


Thomas R. Ittelson is an expert at translating complicated financial topics in an accessible way for non-financial audiences. He is a natural scientist by training (Harvard University in biochemistry) and an entrepreneur. His successes and challenges in for-profit business helped him develop his own accounting acumen and style. He shared that knowledge with others in a book for non-financial managers that has sold over 200,000 copies (Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports, Second Edition, Career Press).

Tom’s recent work with nonprofits led him to recognize that non-financial nonprofit board members, managers and staff all require a simple working knowledge of accounting and financial statements to do their job.

With his new book, Nonprofit Accounting & Financial Statements: An Overview for Board, Management, and Staff, Tom’s audacious nonprofit “mission” is to significantly improve the efficiency and effectiveness of U.S. public charities by improving financial literacy within those organizations.