One of the most useful subjects to understand as an investor is financial accounting. It's not the most exciting topic, but it can make reading financial statements a lot more fruitful. With accounting concepts under your belt, you may be able to spot red flags in balance sheets and income statements before most investors do. Consider taking a course or two in accounting at a local college to boost your accounting knowledge. You can learn a lot about accounting from books, too. Consider John Tracy's How To Read a Financial Report. You'll learn a lot about financial statements in general in Analysis of Financial Statements by Leopold A. Bernstein.
Just to get a taste of the kinds of insights you'll get, check out this Richard Gibbons article, "Profit from Panic," where he addresses the accounting of firms such as General Motors
If you don't have the time or fortitude for a college course in accounting, you can learn more about how to interpret financial statements in our "Crack the Code: Read Financial Statements Like a Pro" online seminar. Give any of our how-to guides a whirl. More than 90% of the people who've taken them have consistently given them high marks. Besides, we offer a money-back guarantee if you're not satisfied. What do you have to lose, except your fear of financial statements?
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