I have spent half of my entire life in school to learn things I don’t really want to know. The more I know the more I don’t understand. And now I am stuck in this working environment doing my working things. What I mean by ‘working’ here is going to a 9 to 5 job in a corporate world where you are required to do silly things and abide stupid rules made by stupid people who are only skilled in kissing other’s asses.
Okay, I am exaggerating, it’s a cynical (although parts of it are true).
The truth is that I am now seeing that Kiyosaki might be right. You know Kiyosaki, right?
Kiyosaki speaks often of what he calls “The Cash flow Quadrant,” a conceptual tool that aims to describe how all the money in the world is earned.
He depicts this concept in four groupings form diagram, split with one vertical and one horizontal line. In each of the four groups there is a letter representing a way in which an individual may earn income.
E: Employee — working for someone else -> this is what I am now
S: Self-employed or Small business owner — where a person owns his own job and is his own boss.
B: (Big) Business owner — where a person owns a “system” of making money, rather than a job to make money.
I: Investor — spending money in order to receive a larger payout in.
Okay back to my random thoughts, not that Kiyosaki was wrong, but I just realized that I should have known that knowing the financial statement is as important as reading the nutrition label on the chocolate bar. Someday I will need to read it. It started several times ago when I and my colleagues discussed the reality of life. We talked about many things, about jobs, economics, hobbies, war, peace, love, marriage, kids, houses, cars, monthly bills, and later we found ourselves agree on one thing, being involved in stock exchange is cool. Ehehe.. So shallow! Pardon our stupid unpredicted thoughts.
Yeah, that’s how it’s started. I have been reading a lot of basic economics thingy ever since. Now I rewrite these financial things that I know just to give myself more understanding.
Financial statements (or financial reports) are formal records of a business’ financial activities. Usually it consists of:
1. Balance sheet,
2. Income statement, (profit and loss statement)
3. statement of cash flows
4. statement of shareholders equity
Please come to finance.google.com or finance.yahoo.com or other sites to check financial report of a company.
There, you should be able to find tables containing below information respectively for every company listed:
Income Statement
Total Revenue
Gross Profit
Operating Income
Net Income
Balance Sheet
Total Current Assets
Total Assets
Total Current Liabilities
Total Liabilities
Total Equity
Cash Flow
Net Income/Starting Line
Cash from Operating Activities
Cash from Investing Activities
Cash from Financing Activities
Net Change in Cash
For more detail of each component, just google it!! 
Come on… you know it will too much for a light reading material, guys. This is just a blog anyway.
This financial report briefly tells you the condition of the enterprise. It should provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions, internally within the enterprise as well as for external user.
My first use of the financial report is for my first $100.000 investment in stock exchange. Phew… yo it is just a game, virtual stock exchange. (of course you dumb ass, why would I be still sitting here if I have those 100 grants).
You can play the game here
Although it is just a game it follows the actual facts in the stock markets, NYSE, NASDAQ, or even stock listed in Jakarta.
Here I can learn that supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks. I can learn what to buy, when to buy, and when to resell again the stocks.
Although financial statement seems to be prepared separately, they are all related. The changes in assets and liabilities that you see on the balance sheet are also reflected in the revenues and expenses that you see on the income statement, which result in the company’s gains or losses. Cash flows provide more information about cash assets listed on a balance sheet and are related, but not equivalent, to net income shown on the income statement. And so on. No one financial statement tells the complete story. But combined, they provide very powerful information for investors. And information is the investor’s best tool when it comes to investing wisely.
Fyuh, enough for this opening writing crap about finance. My boss is coming.
More will come. (if I had time )