Warren Buffett Accounting Book: Reading Financial Statements for Value Investing (Warren Buffett's 3 Favorite Books Book 2)

Warren Buffett Accounting Book: Reading Financial Statements for Value Investing (Warren Buffett's 3 Favorite Books Book 2)

Posted by jack_miller | Published a year ago

With 284 ratings

By: Stig Brodersen and Preston Pysh

Purchased At: $19.99

The Warren Buffett Accounting Book is the second volume learning experience to Warren Buffett's Three Favorite Books. This book teaches: 1. Two methods for calculating the intrinsic value of a company 2. What is a discount rate and how does it work 3. Detailed instructions on how to read an income statement, Balance sheet, and cash flow statement 4. How to calculate important ratios to properly value any business
I must say this book was perfect for me. This is what I mean; I have been investing my money in the markets for the last 3 years. I started from a very inexperienced position because I would read articles on yahoo or SA to find ideas for stocks and take someone else's word on good or bad stocks. After I got burned too many times I started reading many books to figure out what I was doing. I must say that a lot of books were mostly fluff and gave ideas about investing but did not teach you the mechanics or the formulas needed to decipher good stocks from bad stocks. This book approaches investing from mostly mathematical origins. I regret that it took me 3 years to find this book. I wished I would have read this book before I bought my first stock.

- jane_brooks

This book needs a new title because although it does teach about value investing, what you don't know until read the book is that it's written for someone who is a complete novice at accounting. Much of the book is spent explaining basic accounting concepts like balance sheets and line items which is why it should be renamed Accounting for Non-Investors or something like that. If you've ever read a financial statement before and know anything about accounting then please don't buy this book

- jayda_ward

Having read their first book "buffet's three favorite books", I was exited to read their accounting book as well. The book did not disappoint. It builds upon the first book and will provide the reader basic knowledge of one of the most essential part of value investing, accounting principles.

From a beginner's perspective, this book will provide you with the essential knowledge needed to build expertise in the topic. Some of the best things about the book is that it is FUN to read (at school I believed accounting could never be fun...), filled with easy to understand examples and that it also outlines the math behind the various calculations.

Maybe the best thing about this book, is that author's online forum which can be used by anyone. In their forum there are an extensive amount of other investors as well as the authors themselves that may help if questions arises along the read.

For the more experienced investor, I believe this book will provide you with a great summary and a quick reference if you want to look up something quickly.

Best regards,

- axton_sanchez

If you're looking to understand the basics of accounting this is the book for you. I was a business major in college (in the earrly 2000's) and I had to take two accounting courses. When I read the book I had a lot of "a ha!" moments because the stuff I learned in college came back. If I never took accounting in college this book would be even more essential for someone with no accounting background learning to be an investor. Be warned, if you already have basic accounting down you probably do not need this book. For example, if you already know current assets are assets that drive revenue in 12 months or less then you don't need to buy the book.

- keagan_kelly

I can't say enough positive things about Preston and Stig and their tireless effort to provide good quality value investing tutorial products, such Warren Buffett Accounting book. It's a step-by-step guide of Warren Buffett's value investing style; starting from conducting your own financial statement analysis, using stock screener to select potential undervalued stocks, and ending with calculating their intrinsic value . It's a clear and concise overview of the value investing methodology. Thank you, and keep-up the great work with "The Investors Podcast" too.

- giovanna_perez

I recently graduated with a 4 year degree in Finance, now as an entry level financial analyst, this book gives a great overview of the stock market and awesome in depth overview of the financial statements. If you have a background in finance and are shaky on your accounting skills and need a touch up on what exactly each line of the income statement, balance sheet and cash flow statement then I highly recommend getting this book. Very light read and awesome information. Everyone should read this before investing in anything in the stock market, wish I would have read it in college.

- jaelynn_cook

The “Warren Buffett's Three Favorite Books“ series (this being book 2) certainly has provided a great foundation for new investors. If you want to get a good grasp without getting too heavy, submerge yourself and use the tools, links and videos provided every step of the way. If are unfamiliar with certain words just look them up. Before I struggle with Discount Cash Flow, and what exactly is Free Cash Flow. My cohort at University couldn’t explain it but could work out the problems. Now I know and can explain in simple terms. Couple that with actual investing and your investment advisor should be impressed. Mine was. In fact the relationship has evolved to us just discussing the markets and even now it seems I am more in tuned than the advisor. So much so they think I should invest in US markets, I am from Jamaica. Now I am looking to implement generational wealth and go through the actual 3 book’s referenced in the series. I would and have recommended this book to friends.

Note though: I take investing as serious as my 9-5, if not more seriously as I look to build generational wealth for my family.

- payton_sanders

I really enjoyed this book. Preston and stig do a wonderful job of making accounting easy to understand. This book is easy to read and provides a lot of great metrics and warning signs to look out for in a company.

I really appreciated that they explain everything from the very basics and worked their way through each statement with examples.

Overall easy to follow and will surely be a reference for me as I move on to valuation.

- marshall_parker

Easy to understand, concise and packed full of information. I have read a number of investing books and this one, coupled with the buffettbooks website and YouTube lessons (both free) explain key terms and what to look for. I also like how it gives extra detail, for example, it may say “ look for a Ratio below 1.5 because..” Highly recommended.

- johnny_rivera

The book is good in itself teaching the 2 strategies employed by value investors while analysing financial statements. However, I think I may have recieved a counterfeit as the print and paper appear to be of cheap quality.

- aurora_gomez

I have only one note to make: bought it as the original book and came a new but apparently counterfeit book;
as someone previously mentioned as well.

- lucille_murphy

Wow! This book is absolutely brilliant, as a beginner this explains everything you need to know in the greatest of detail and in the simplest terms. I really couldn’t recommend this book enough for anyone looking to start analysis of company financials. A big thank you to the authors this is a game changer for me.

- juliette_miller

The maths made it a bit sticky for an old gibber, but in conjunction with the website video's "very illuminating" my understanding of company accounts has been reformed and my share choices will probably reflect this, lets hope I still make a profit. I personally used the book in conjunction with Stockopedia which I pay for. The Buffet website used msn money.

- denver_thompson

Simple, clear, straightforward, assumes one knows next to nothing.
First place i have ever found that shows one how to do the workings for Buffets cashflow valuations.
And links to an excellent website!
Highly recommended!

- abby_roberts

If you ever need to know anything about accounting in a simple easy to ready way, this is the book to go for.

- luna_torres

A very short and easiest way to undetstand the financial world .
I've bought all books of Preston Pysh
The way he explains things i ve never seen in other books .

- maggie_campbell

Fantastic book. I am a massive fans of the Investors podcast so thought I would buy the book. It is really clear, easy to follow and has some excellent exampled for the beginner like me. The second half beefs up so it is a great learning tool too.

- robert_cook

Very good, many thanks.

- elora_nguyen

Very educating without boredom lol

- bentlee_king

top knowledge

- valentin_harris

Couldn't be more pleased to find a book packed with so much information, whilst at the same time explained so well any new investor could comprehend.

- jordy_lee

Every business owner should read it

- hope_evans

I am a new investor and have some basic accounting knowledge from the small business I am currently running. This is a very good book for entry level value investment learner. Before reading this book, I did some research of Buffet's Value Investment theory before reading this book and was confused with many concept such as P/B, ROE, FCF etc. This book gives me very straight forward understanding of these concepts and their importance on analyzing a company.

- yahya_jackson

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