Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports (Third Edition)

Financial reports can seem like a maze of unfamiliar terms until you see how the pieces fit together. Thomas R. Ittelson’s Financial Statements takes a visual, step-by-step approach to the balance sheet, income statement, and statement of cash flows—showing how transactions affect each report and how the statements work together.

Make sense of the three core statements

This revised, updated, and expanded third edition explains the structure and purpose of the reports used to describe a company’s financial condition. Instead of leaving accounting terms unexplained, it introduces the vocabulary in accessible language and connects concepts to clear transaction examples.

Follow the effect of a transaction

A useful way to understand financial reporting is to watch what changes when a business event occurs. Ittelson’s visual presentation traces those effects across the statements, helping readers see why a single transaction may matter in more than one place.

See how the reports connect

The balance sheet, income statement, and cash flow statement each tell a different part of the financial story. By bringing them into view together, the book helps readers interpret their relationships rather than treating each report as a separate collection of numbers.

For readers who work with business numbers

This guide is suited to non-financial managers, business learners, and other readers who want a clearer grounding in financial reports. Its plain-language explanations make the subject approachable for readers seeking to understand the statements or learn how they are created.

A clearer starting point for financial reporting

For anyone who has looked at a set of company accounts and wondered what the figures are saying, this book offers a structured way to begin: learn the terms, follow the transactions, and connect the reports.