Knowing numbers

I dropped into RD for the first time in a while, and someone was asking about sources other than RD to learn about numbers. I posted the following, and thought it might be useful here for newer/less experienced members.

So, here are what I consider some good starting resources for learning about numbers:

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- Any good Accounting 101 book - check university libraries and university book stores
- Management accounting books - learn key financial statements inside and out, and learn why/how/when to use different ratios.
- Annual reports of your favourite publically-listed companies. Read them again and again, analyse them very deeply until you know it inside out and you can make informed judgments about the company, with the ability to back up what you say. Choose companies whose type of business you understand.

The last one is the actual practice which will help you build your skills. Reading books increases the information you have, but practice turns this into skill. It's where the rubber hits the road, and you'll be different to many people who like to read books and feel good about educating themselves, but ultimately just spin their wheels.
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Since this is a more advanced forum, I'd like to add the following:

Make sure you use an accounting book written for your country. Accounting has basic principles which are common to most places, but each country has differing conventions which can play an important part in how you interpret the numbers.

Once you have a good grasp of accounting, make sure you understand how tax accounting differs from normal accounting. For example: normal accounting conventions might require you to depreciate an asset you own in a certain way, but tax law might limit the amount of the depreciation, or otherwise prescribe how it is to be done.


Feel free to post more for everyone's benefit, if you so desire.

Daniel.