MARTIN FRIDSON, FERNANDO ALVAREZ – FINANCIAL STATEMENT ANALYSIS A PRACTITIONER’S GUIDE

The essential discipline of financial statement analysis has been updated.

In. The fourth edition of financial statement analysis. The analytical framework you need to scrutinize financial statements, whether you’re evaluating a company’s stock price or determining valuations for a merger or acquisition, is provided by leading investment authority Martin Fridson.

This is fully revised and up-to-date. The fourth edition. Fresh information will help you to evaluate financial statements in today’s volatile markets and uncertain economy, and allow you to get past the sometimes biased portrait of a company’s performance.

• Reflects changes in the financial reporting landscape, including issues related to the financial crisis of 2008-2009
• Provides guidelines on how to interpret balance sheets, income statements, and cash flow statements
• Offers information for maximizing the accuracy of forecasts and a structured approach to credit and equity evaluation

There are real-life examples and expert advice. The fourth edition of financial statement analysis. You will gain a firm understanding of the techniques that will help you interpret financial statements, which are designed to hide more than reveal.

TABLE OF CONTENTS

Preface to the fourth edition.

Acknowledgments xv

The first part is reading between the lines.

The Adversarial Nature of Financial Reporting 3 is chapter 1

Financial reporting has a purpose.

There are Flaws in the Reasoning 8.

Big 11 Baths and small profits.

Maximizing growth expectations

Downplaying Contingencies 18

Being skeptical is important.

Conclusion 24.

The basic financial statements are part two.

Chapter 2 is about the balance sheet.

The value problem is 30

There are Comparability Problems in the Valuation of Financial Assets.

There was an instantaneous wipeout of value.

How good is it?

The old-fashioned way of losing value.

40 is true equity.

There are pros and cons of a market-based equity.

The common form balance sheet.

Conclusion 45.

Chapter 3 contains the income statement.

Making the numbers talk.

How realistic are the numbers?

Conclusion 77

The Statement of Cash Flows is chapter 4.

There is a cash flow statement.

Buyout 81

Analytical Applications 86

The company’s cash flow and life cycle.

Financial flexibility is a concept.

In defense of Slack 104.

Conclusion 106.

A closer look at profits is part three.

What is profit?

Accounting profits are more than Bona Fide profits.

What is revenue?

Which costs are included?

How far can the concept be stretched?

Conclusion

Chapter 6 includes revenue recognition.

Drug business channel-stuffing

There is a second take on earnings.

Astray was on Layaway.

Membership fees are recognized.

Liberal revenue is a potpourri.

There are 131 recognition techniques.

Fattening earnings with empty calories.

Tardy Disclosure at Halliburton.

Managing earnings with reserves.

Fudging the numbers is a systematic problem.

Conclusion

Expense recognition chapter 7

The Deferred Profit Plan from Nortel.

A person is grasping for earnings at a company.

Time shifting at Freddie Mac.

Conclusion 159.

Chapter 8 covers the applications and limitations of EBITDA 161.

The total enterprise value is 162.

The role of earnings before interest, taxes, depreciation and amortization in credit analysis.

Abusing earnings before interest, taxes, depreciation and amortization 169.

There is a more comprehensive cash flow measure.

Working capital adds cash.

Flow analysis 174

Conclusion

Chapter 9 covers the reliability of disclosure and audits.

The deal is an artful one.

There are death duties.

There are systematic problems in auditing.

Conclusion 189.

Chapter 10 deals with mergers and acquisitions.

Maximizing reported earnings

Managing acquisition dates and avoiding restatements.

Conclusion

Chapter 11 is about fraud detection.

There are signs of manipulation.

Fraudsters have few limits.

A media sensation named Enron.

The Excruciating Ordeal was written by HealthSouth.

Milk and other liquid assets.

Conclusion

Part four contains forecasts and security analysis.

Chapter 12 is about forecasting financial statements.

A typical one-year projection.

Sensitivity analysis with financial statements

Financial flexibility is a project.

Financial statements from Pro Forma.

There are pro forma statements for 246 acquisitions.

Projections for multiple years.

Conclusion

Chapter 13 deals with credit analysis.

There are balance sheet ratios.

Income statement ratios

There is a statement of cash flows ratios.

There are combination ratios.

Credit risk is related to ratios.

Conclusion 304

Chapter 14 is Equity Analysis.

The model is called the Dividend Discount Model.

The price-earnings ratio is 313.

P/E Multiples vary.

The Du Pont Formula.

There is a valuation through restructuring potential.

The conclusion was 334.

The Explanation of Pro Forma Adjustments is part of the APPENDIX.

Notes 341

Glossary 353

There is a bibliography.

About the authors

Index 371

AUTHOR INFORMATION

The man is MARTIN FRIDSON. One of the world’s largest asset managers has a Global Credit Strategist. He was known for his innovative work in credit analysis and investment strategy. Fridson served as president of the Fixed Income Analysts Society, governor of the Association for Investment Management and Research, and director of the New York Society of Security Analysts.

Fernando Alvarez is a man. He teaches entrepreneurship finance at the Columbia University Graduate Business School. He was associate professor in the Finance and Economics Department and director of entrepreneurship programs at Rutgers Business School. At New York University, he was an associate professor of innovation and entrepreneurship, and at Babson College, he was an assistant professor of finance.

REVIEWS

That’s right. A guide to financial statement analysis. There are many challenges faced by practitioners who rely on financial statements to make investment and lending decisions. While valuable for their insights, reference books about accounting are rarely enjoyable to read. The authors integrate fascinating real-life examples and fictional scenarios into each chapter to illustrate their points. For anyone with a passing interest in the subject, or for new analysts to learn the trade. Inancial statement analysis. It is an amazing resource. That’s right. Christopher Shayne. The Director of Product Operations is at Moody’s.

Any book that reaches its 4th edition should be good. That is true in spades. Financial statement analysis . A classic has been written by Fridson and Alvarez. It is necessary for any investor intending to buy individual company stocks or bonds to have a constant reference source on their bookshelf. That’s right. There is a Canadian financial blog.

Benjamin Graham’s Security Analysis served as a reference book for Value Partners, but since then they have been using Martin Fridson’s Financial Statement Analysis: A Practioner’s Guide. That’s right. Ronald Chan and Bruce C. N. Greenwald wrote The Value Investors: Lessons from the World’s Top Fund Managers.

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Financial Statement Analysis A Practitioner’s Guide is a book by Martin Fridson.