PREFACE TO THE NINTH EDITION

      This book has stood the test of time and reminds all of us that fortifying your understanding of financial reports and statements has been, is, and will always be essential evergreen knowledge. After 40 years in print, spanning nine editions, it has survived countless economic and financial challenges—and is still going strong. My son Tage joined me as coauthor in the previous edition, and I willingly share credit with him for the book’s continued success.

      This edition catches up with major changes in financial reporting since the eighth edition was released in 2013. It also expands our discussion on how financial results are communicated. At the same time, however, the architecture of the book remains unchanged. The framework of the book has proved very successful for 40 years so I’d be a fool to mess with this winning formula. (My mother did not raise a fool.)

      Cash flows are underscored throughout the book and remain a central focus of the current edition. In business, everything starts and ends with cash flow, which is a concept we never stray too far from.

      As with all previous editions, our book explains the connectivity of the different pieces of information reported in financial statements. In reading financial statements you need to know how the different elements are connected. You cannot grab one piece of information in one place and ignore its other dimensions and contexts. Financial statements are, essentially, spreadsheets, although they do not demonstrate what’s connected to what.

We have prepared all the exhibits in the book as Excel worksheets. To request a copy of the workbook file of all the exhibits, please feel free to contact one of us via email (me at [email protected] or Tage at [email protected]).

      In summary, I express my sincere thanks to all of you who have sent compliments about our book. The royalties from sales of the book are nice, but the messages from readers form the real icing on the cake.

      Not many books of this ilk make it to the ninth edition. It takes a good working partnership between the author and the publisher. I most sincerely thank the many people at John Wiley & Sons who have worked with me over four decades.

      Gordon B. Laing was my original editor and sponsor of the book. His superb editing was a blessing. I couldn’t have done it without him.

      JOHN A. TRACY

      Boulder, Colorado August 2019