Meet the father of value investing... and Warren Buffett's mentor
"In 1984, [Warren] Buffet returned to Columbia to give a speech commemorating the fiftieth anniversary of the publication of "Security Analysis". During that speech, he presented his own investment record as well as those of Ruane, Knapp, and Schloss [other successful investment managers who were students of Graham at Columbia]. In short, each of these men posted investment results that blew away the returns of the overall market. Buffett noted that each of the portfolios varied greatly in the number and type of stocks, but what did not vary was the managers' adherence to Graham's investment principles."

It is difficult to encapsulate Benjamin Graham's investing style in a few sentences or paragraphs. Readers are strongly urged to refer to his "The Intelligent Investor" to obtain a more thorough understanding of his investment principles.

In brief, the essence of Graham's value investing is that any investment should be worth substantially more than an investor has to pay for it. He believed in thorough analysis, which we would call fundamental analysis. He sought out companies with strong balance sheets, or those with little debt, above-average profit margins, and ample cash flow. (For more insight, see Introduction To Fundamental Analysis and Testing Balance Sheet Strength.)

He coined the phrase "margin of safety" to explain his common-sense formula that seeks out undervalued companies whose stock prices are temporarily down, but whose fundamentals, for the long run, are sound. The margin of safety on any investment is the difference between its purchase price and its intrinsic value. The larger this difference is (purchase price below intrinsic), the more attractive the investment - both from a safety and return perspective - becomes. The investment community commonly refers to these circumstances as low value multiple stocks (P/E, P/B, P/S).

Graham also believed that market valuations (stock prices) are often wrong. He used his famous "Mr. Market" parable to highlight a simple truth: stock prices will fluctuate substantially in value. His philosophy was that this feature of the market offers smart investors "an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal."

Too short.
This book is a brief summary of how to interpret financial statements. While the book has some good points my main complaint is with its brevity. It also appears this book is best suited for those already familiar with the subject, perhaps as a short reminder of what to look for in financial statements.

I think this book would have been better if it had been expanded somewhat and possibly also if it had been included in either the book Security Analysis or in The Intelligent Investor. You should also note that this book is from 1937 and both accounting terminology and standards have changed somewhat since then, as have the types of businesses that exist.

If you are looking for a book that explains accounting really well at a beginner's level then I would instead recommend: Financial Statements by Thomas Ittelson. If you are looking for a book that reviews in more depth the interpretation of financial statements I would recommend: Analysis for Financial Management by Robert Higgins.

The Interpretation of Financial Statements
A book that really makes you think. Benjamin Graham does it again. After reading The Intelligent Investor I had to find something else written by Graham. This book is full of everything you would need to know to start your analyzation of a companies books or balance sheets. Very informative!

(None)
A short, concise explanation of financial statements by one of the all-time great investors/teachers - Ben Graham. A bit dated today but much of it is still relevant. Since Graham occasionally assumes a knowledge of investing which may be somewhat beyond the novice investor, HOWEVER, if you can't follow the book you're NOT ready to begin investing (go back and get a simpler text until you can understand ALL of this short work - THEN you're ready to put good money at hazard in the Financial Markets).

A classic
Yes it is a classic but it is also old and outdated - this is what you are buying when you buy this book. A new book entitle Warren Buffett and the Interpretation of Financial Statements is far more timely book.