This book has stood the test of time and reminds all of us that fortifying your understanding of financial reports and statements has been, is, and will always be essential evergreen knowledge. After 40 years in print, spanning nine editions, it has survived countless economic and financial challenges—and is still going strong. My son Tage joined me as coauthor in the previous edition, and I willingly share credit with him for the book’s continued success.

This edition catches up with major changes in financial reporting since the eighth edition was released in 2013. It also expands our discussion on how financial results are communicated. At the same time, however, the architecture of the book remains unchanged. The framework of the book has proved very successful for 40 years so I’d be a fool to mess with this winning formula. (My mother did not raise a fool.) Cash flows are underscored throughout the book and remain a central focus of the current edition. In business, everything starts and ends with cash flow, which is a concept we never stray too far from.

As with all previous editions, our book explains the connectivity of the different pieces of information reported in financial statements. In reading financial statements you need to know how the different elements are connected. You cannot grab one piece of information in one place and ignore its other dimensions and contexts. Financial statements are, essentially, spreadsheets, although they do not demonstrate what’s connected to what.