Warren Buffett and the Interpretation of Financial Statements

The Search for the Company with a Durable Competitive Advantage

Mary Buffett, David Clark

Publisher: Simon and Schuster, 2008, 202 pages

ISBN: 978-1-84983-319-8

Keywords: Finance

Last modified: July 28, 2021, 11:03 p.m.

Buffett and Clark clearly outline Warren Buffett's strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal work of Buffett's mentor, Benjamin Graham (The Interpretation of Financial Statements, 1937), this book presents Buffett's interpretation of financial statements with anecdotes and quotes from the master investor himself.

Once readers complete and master Buffett's simple financial calculations and methods for interpreting a company's financial statement, they'll be well on their way to identifying which companies are going to be tomorrow's winners — and which will be the losers they should avoid at all costs.

Destined to become a classic in the world of investment books, Warren Buffett and the Interpretation of Financial Statements is the perfect companion volume to The New Buffettology and The Tao of Warren Buffett.

    • Introduction
    • Chapter 1: Two Great Revelations That Made Warren the Richest Person in the World
    • Chapter 2: The Kind of Business That Will Make Warren Superrich
    • Chapter 3: Where Warren Starts His Search for the Exceptional Company
    • Chapter 4: Durability Is Warren's Ticket to Riches
    • Chapter 5: Financial Statement Overview: Where the Gold Is Hidden
    • Chapter 6: Where Warren Goes to Find Financial Information
  • The Income Statement
    • Chapter 7: Where Warren Starts: The Income Statement
    • Chapter 8: Revenue: Where the Money Comes In
    • Chapter 9: Cost of Goods Sold: For Warren the Lower the Better
    • Chapter 10: Gross Profit/Gross Profit Margin: Key Numbers for Warren in His Search for Long-Term Gold
    • Chapter 11: Operating Expenses: Where Warren Keeps a Careful Eye
    • Chapter 12: Selling, General, and Administrative Expenses
    • Chapter 13: Research and Development: Why Warren Stays Away from It
    • Chapter 14: Depreciation: A Cost Warren Can't Ignore
    • Chapter 15: Interest Expense: What Warren Doesn't Want
    • Chapter 16: Gain (or Loss) on Sale of Assets and Other
    • Chapter 17: Income Before Tax: The Number That Warren Uses
    • Chapter 18: Income Taxes Paid: How Warren Knows Who Is Telling the Truth
    • Chapter 19: Net Earnings: What Warren Is Looking For
    • Chapter 20: Per-Share Earnings: How Warren Tells a Winner from the Losers
  • Balance Sheet
    • Chapter 21: Balance Sheet in General
    • Chapter 22: Assets
    • Chapter 23: Current Asset Cycle: How the Money Is Made
    • Chapter 24: Cash and Cash Equivalents: Warren's Pile of Loot
    • Chapter 25: Inventory: What the Company Needs to Buy and What the Company Needs to Sell
    • Chapter 26: Net Receivables: Money Owned to the Company
    • Chapter 27: Prepaid Expenses/Other Current Assets
    • Chapter 28: Total Current Assets and the Current Ratio
    • Chapter 29: Property, Plant, and Equipment: For Warren Not Having Them Can Be a Good Thing
    • Chapter 30: Goodwill
    • Chapter 31: Intangible Assets: Measuring the Unmeasurable
    • Chapter 32: Long-Term Investments: One of the Secrets to Warren's Success
    • Chapter 33: Other Long-Term Assets
    • Chapter 34: Total Assets and the Return on Total Assets
    • Chapter 35: Current Liabilities
    • Chapter 36: Accounts Payable, Accrued Expenses, and Other Current Liabilities
    • Chapter 37: Short-Term Debt: How It Can Kill a Financial Institution
    • Chapter 38: Long-Term Debt Coming Due and the Troubles It Can Cause
    • Chapter 39: Total Current Liabilities and the Current Ratio
    • Chapter 40: Long-Term Debt: Something That Great Companies Don't Have a Lot Of
    • Chapter 41: Deffered Income Tax, Minority Interests, and Other Liabilities
    • Chapter 42: Total Liabilities and the Debt to Shareholders' Equity Ratio
    • Chapter 43: Shareholders' Equity/Book Value
    • Chapter 44: Preferred and Common Stock: Additional Paid in Capital
    • Chapter 45: Retained Earnings: Warren's Secret for Getting Superrich
    • Chapter 46: Treasure Stock: Warren Likes to See This on the Balance Sheet
    • Chapter 47: Return on Shareholders' Equity: Part One
    • Chapter 48: Return on Shareholders' Equity: Part Two
    • Chapter 49: The problem with Leverage and the Tricks It Can Play on You
  • The Cash Flow Statement
    • Chapter 50: The Cash Flow Statement: Where Warren Goes to Find the Cash
    • Chapter 51: Capital Expenditures: Not Having Them Is One of the Secrets to Getting Rich
    • Chapter 52: Stock Buybacks: Warren's Tax-Free Way to Increase Shareholder Wealth
  • Valuing the Company With A Durable Competitive AdvantageThe Income Statement
    • Chapter 53: Warren's Revolutionary Idea of the Equity Bond and How It Has Made Him Superrich
    • Chapter 54: The Ever-Increasing Yield Created by the Durable Competitive Advantage
    • Chapter 55: More Ways to Value a Company with a Durable Competitive Advantage
    • Chapter 56: How Warren Determines the Right Time to Buy a Fantastic Business
    • Chapter 57: How Warren Determines It Is Time to Sell
    • Appendix


Warren Buffett and the Interpretation of Financial Statements

Reviewed by Roland Buresund

Bad ** (2 out of 10)

Last modified: Nov. 29, 2011, 11:55 p.m.

This is a plain overview of financial statements and what each segment means. What you'll learn in Finance 101…, but with references to Warren Buffett from a former daughter-in-law that uses his name to profit from basic books.

Anyone that feels this is giving them any insight into Warren Buffett and his investment strategy, deserves to loose his/her money! Not that the desciptions are off or bad: they are not. But they have nothing to do with the title and the promises on the book cover.

There are better books, avoid it.


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