Benjamin Graham and Charles McGolrick outline the mechanics of corporate accounting to determine the intrinsic value of a business. The text defines the specific components of the balance sheet, such as current assets, fixed assets, and liabilities, alongside the income account’s relationship to earnings per share. Graham explains how to calculate financial ratios, including the current ratio, debt-to-equity, and book value. By examining capital structure and depreciation rates, the authors demonstrate how to identify if a company possesses a margin of safety.
This guide is for individual investors and credit analysts who evaluate stocks based on fundamental data rather than market momentum. Readers learn to distinguish between a company's reported profit and its actual earning power. The book provides a technical vocabulary for reading annual reports and teaches the reader to spot discrepancies between market price and asset value. One walks away with a systematic framework for judging the solvency and profitability of any publicly traded corporation.
- Published
- 1955
- Language
- EN
