The year 2008 was one most investors would like to forget.


The investment bank Bear Stearns was sold at a fire-sale price to J.P. Morgan in March 2008. Lehman

Brothers filed for the largest bankruptcy in U.S. history. The country faced its greatest financial crisis since

the Great Depression.


Many have asked since: Were these events foreseeable?


An examination of Lehman Brothers' financial statements from 2007 clearly reflects the likelihood that the

company would fail.


One lesson we can learn from these failures is that it is our job to understand the accounting and financial

reporting issues of the companies in which we invest our time or money.


The key constituents of any organization include management, employees, clients and customers, shareholders,

lenders and creditors, members of the board of directors and even taxation authorities. All

have an interest in the financial performance of the organization.


How do these stakeholders make their decisions and evaluations?


The answer is through accounting data. The stories the data tell are crucial to understanding the overall

financial fitness of a company.


Finance puts the language or the stories of accounting to practical use.


Not everyone may see a Global Financial Crisis coming but learning the language of accounting and finance

is critical to making better and more informed investment decisions and to interact more effectively with

management and accounting staff.


Source: Critical Business Skills, The Great Courses