{"product_id":"financial-statement-analysis-isbn-9781119457145","title":"Financial Statement Analysis","description":"\u003cb\u003eThe updated, real-world guide to interpreting and unpacking GAAP and non-GAAP financial statements\u003c\/b\u003e \u003cp\u003eIn \u003ci\u003eFinancial Statement Analysis, 5th Edition,\u003c\/i\u003e leading investment authority Martin Fridson returns with Fernando Alvarez to provide 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. Rather than taking financial statements at face value, you'll learn practical and straightforward analytical techniques for uncovering the reality behind the numbers. This fully revised and up-to-date 5th Edition offers fresh information that will help you to evaluate financial statements in today's volatile markets and uncertain economy. The declining connection between GAAP earnings and stock prices has introduced a need to discriminate between instructive and misleading non-GAAP alternatives. This book integrates the alternatives and provides guidance on understanding the extent to which non-GAAP reports, particularly from US companies, may be biased. \u003c\/p\u003e\u003cp\u003eUnderstanding financial statements is an essential skill for business professionals and investors. Most books on the subject proceed from the questionable premise that companies' objective is to present a true picture of their financial condition. A safer assumption is that they seek to minimize the cost of raising capital by portraying themselves in the most favorable light possible. \u003ci\u003eFinancial Statement Analysis\u003c\/i\u003e teaches readers the tricks that companies use to mislead, so readers can more clearly interpret statements. \u003c\/p\u003e\u003cul\u003e \u003cli\u003eLearn how to read and understand financial statements prepared according to GAAP and non-GAAP standards\u003c\/li\u003e \u003cli\u003eCompare CFROI, EVA, Valens, and other non-GAAP methodologies to determine how accurate companies' reports are\u003c\/li\u003e \u003cli\u003eImprove your business decision making, stock valuations, or merger and acquisition strategy\u003c\/li\u003e \u003cli\u003eDevelop the essential skill of quickly and accurately gathering and assessing information from financial statements of all types\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eProfessional analysts, investors, and students will gain valuable knowledge from this updated edition of the popular guide. Filled with real-life examples and expert advice, \u003ci\u003eFinancial Statement Analysis, 5th Edition,\u003c\/i\u003e will help you interpret and unpack financial statements. \u003c\/p\u003e\u003cp\u003ePreface to Fifth Edition xi\u003c\/p\u003e \u003cp\u003eAcknowledgments xv\u003c\/p\u003e \u003cp\u003e\u003cb\u003e Part One\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReading Between the Lines 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Adversarial Nature of Financial Reporting 3\u003c\/p\u003e \u003cp\u003eThe Purpose of Financial Reporting 4\u003c\/p\u003e \u003cp\u003eThe Flaws in the Reasoning 8\u003c\/p\u003e \u003cp\u003eSmall Profits and Big Baths 12\u003c\/p\u003e \u003cp\u003eMaximizing Growth Expectations 13\u003c\/p\u003e \u003cp\u003eDownplaying Contingencies 20\u003c\/p\u003e \u003cp\u003eThe Importance of Being Skeptical 23\u003c\/p\u003e \u003cp\u003eConclusion 27\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Basic Financial Statements 31\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Balance Sheet 33\u003c\/p\u003e \u003cp\u003eThe Value Problem 34\u003c\/p\u003e \u003cp\u003eComparability Problems in the Valuation of Financial Assets 36\u003c\/p\u003e \u003cp\u003eInstantaneous Wipeout of Value 38\u003c\/p\u003e \u003cp\u003eHow Good Is Goodwill? 40\u003c\/p\u003e \u003cp\u003eLosing Value the Old-Fashioned Way 44\u003c\/p\u003e \u003cp\u003eTrue Equity Is Elusive 45\u003c\/p\u003e \u003cp\u003eBook Value May Overstate Reality 46\u003c\/p\u003e \u003cp\u003ePros and Cons of a Market-Based Equity Figure 49\u003c\/p\u003e \u003cp\u003eThe Common Form Balance Sheet 51\u003c\/p\u003e \u003cp\u003eConclusion 53\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Income Statement 55\u003c\/p\u003e \u003cp\u003eMaking the Numbers Talk 55\u003c\/p\u003e \u003cp\u003eHow Real Are the Numbers? 61\u003c\/p\u003e \u003cp\u003eConclusion 85\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Statement of Cash Flows 87\u003c\/p\u003e \u003cp\u003eThe Cash Flow Statement and the Leveraged Buyout 89\u003c\/p\u003e \u003cp\u003eAnalytical Applications 95\u003c\/p\u003e \u003cp\u003eIn Defense of Slack 121\u003c\/p\u003e \u003cp\u003eConclusion 123\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Closer Look at Profits 125\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Is Profit? 127\u003c\/p\u003e \u003cp\u003eBona Fide Profits versus Accounting Profits 127\u003c\/p\u003e \u003cp\u003eWhich Costs Count? 130\u003c\/p\u003e \u003cp\u003eConclusion 134\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRevenue Recognition 135\u003c\/p\u003e \u003cp\u003eMaking It Up at Gowex 135\u003c\/p\u003e \u003cp\u003eGlobo’s Foreseen Fall from Grace 139\u003c\/p\u003e \u003cp\u003eChannel-Stuffing in the Drug Business 143\u003c\/p\u003e \u003cp\u003eA Second Take on Earnings 146\u003c\/p\u003e \u003cp\u003eMaking the Numbers at M\/A-Com 149\u003c\/p\u003e \u003cp\u003eAstray on Layaway 151\u003c\/p\u003e \u003cp\u003eRecognizing Membership Fees 152\u003c\/p\u003e \u003cp\u003eA Potpourri of Liberal Revenue Recognition Techniques 155\u003c\/p\u003e \u003cp\u003eFattening Earnings with Empty Calories 156\u003c\/p\u003e \u003cp\u003eTardy Disclosure at Halliburton 162\u003c\/p\u003e \u003cp\u003eManaging Earnings with Rainy Day Reserves 165\u003c\/p\u003e \u003cp\u003eFudging the Numbers: A Systematic Problem 168\u003c\/p\u003e \u003cp\u003eConclusion 171\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eExpense Recognition 173\u003c\/p\u003e \u003cp\u003eDiamond Foods’s Movable Expenses 173\u003c\/p\u003e \u003cp\u003eNortel’s Deferred Profit Plan 176\u003c\/p\u003e \u003cp\u003eGrasping for Earnings at General Motors 181\u003c\/p\u003e \u003cp\u003eTime-Shifting at Freddie Mac 184\u003c\/p\u003e \u003cp\u003eConclusion 186\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Applications and Limitations of EBITDA 187\u003c\/p\u003e \u003cp\u003eEBIT, EBITDA, and Total Enterprise Value 188\u003c\/p\u003e \u003cp\u003eThe Role of EBITDA in Credit Analysis 193\u003c\/p\u003e \u003cp\u003eAbusing EBITDA 196\u003c\/p\u003e \u003cp\u003eA More Comprehensive Cash Flow Measure 198\u003c\/p\u003e \u003cp\u003eWorking Capital Adds Punch to Cash Flow Analysis 201\u003c\/p\u003e \u003cp\u003eConclusion 203\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Reliability of Disclosure and Audits 205\u003c\/p\u003e \u003cp\u003eWhere Was the Cash? 206\u003c\/p\u003e \u003cp\u003eSloppiness Can Be a Red Flag 210\u003c\/p\u003e \u003cp\u003eHow Manipulation Evades Detection 214\u003c\/p\u003e \u003cp\u003eSystematic Problems in Auditing 215\u003c\/p\u003e \u003cp\u003eConclusion 220\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMergers-and-Acquisitions Accounting 221\u003c\/p\u003e \u003cp\u003eGoodwill Goes Bad 223\u003c\/p\u003e \u003cp\u003eDouble Trouble 224\u003c\/p\u003e \u003cp\u003eConclusion 227\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIs Fraud Detectable? 229\u003c\/p\u003e \u003cp\u003eTelltale Signs of Manipulation 230\u003c\/p\u003e \u003cp\u003eFraudsters Know Few Limits 233\u003c\/p\u003e \u003cp\u003eEnron: A Media Sensation 233\u003c\/p\u003e \u003cp\u003eHealthSouth’s Excruciating Ordeal 242\u003c\/p\u003e \u003cp\u003eMilk and Other Liquid Assets 249\u003c\/p\u003e \u003cp\u003eTrouble Was Brewing at Luckin 252\u003c\/p\u003e \u003cp\u003eConclusion 254\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eForecasts and Security Analysis 255\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eForecasting Financial Statements 257\u003c\/p\u003e \u003cp\u003eA Typical One-Year Projection 257\u003c\/p\u003e \u003cp\u003eSensitivity Analysis with Projected Financial Statements 270\u003c\/p\u003e \u003cp\u003eProjecting Financial Flexibility 276\u003c\/p\u003e \u003cp\u003ePro Forma Financial Statements 279\u003c\/p\u003e \u003cp\u003eMultiyear Projections 285\u003c\/p\u003e \u003cp\u003eConclusion 299\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCredit Analysis 301\u003c\/p\u003e \u003cp\u003eBalance Sheet Ratios 302\u003c\/p\u003e \u003cp\u003eIncome Statement Ratios 311\u003c\/p\u003e \u003cp\u003eStatement of Cash Flows Ratios 316\u003c\/p\u003e \u003cp\u003eCombination Ratios 318\u003c\/p\u003e \u003cp\u003eRelating Ratios to Credit Risk 326\u003c\/p\u003e \u003cp\u003eConclusion 342\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEquity Analysis 343\u003c\/p\u003e \u003cp\u003eThe Dividend Discount Model 344\u003c\/p\u003e \u003cp\u003eThe Price-Earnings Ratio 350\u003c\/p\u003e \u003cp\u003eThe Du Pont Formula 360\u003c\/p\u003e \u003cp\u003eValuation through Restructuring Potential 364\u003c\/p\u003e \u003cp\u003eAdvanced Equity Analysis 370\u003c\/p\u003e \u003cp\u003eConclusion 373\u003c\/p\u003e \u003cp\u003eNotes 375\u003c\/p\u003e \u003cp\u003eGlossary 387\u003c\/p\u003e \u003cp\u003eFurther Reading 405\u003c\/p\u003e \u003cp\u003eAbout the Authors 407\u003c\/p\u003e \u003cp\u003eIndex 409\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMARTIN S. FRIDSON\u003c\/b\u003e is Chief Investment Officer at Lehmann Livian Fridson Advisors, a New York-based investment management firm founded on fundamental security analysis. He is past President of the Fixed Income Analysts Society.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eFERNANDO ALVAREZ \u003c\/b\u003ehas been a faculty member at Babson College, Rutgers University School of Business, NYU-Stern, and Columbia Business School. His research interests include the interaction of strategy, financial statement analysis, valuation models, and stock market reactions to business decisions.  \u003c\/p\u003e\u003cp\u003eFinancial statement analysis is a foundational skill for people involved in investment management, corporate finance, commercial lending, and the credit markets. It has become an increasingly complicated endeavor, with corporate financial statements becoming ever more difficult to understand and interpret.\u003c\/p\u003e \u003cp\u003eThe newly revised \u003ci\u003eFifth Edition\u003c\/i\u003e of \u003ci\u003eFinancial Statement Analysis: A Practitioner’s Guide\u003c\/i\u003e delivers a straightforward and practical guide to overcoming the challenges inherent to deciphering modern corporate financial statements. \u003c\/p\u003e\u003cp\u003eLeading investment professional Martin Fridson and financial reporting expert Fernando Alvarez offer readers a concise and authoritative resource dedicated to outlining the analytical framework required to scrutinize financial statements. Regardless of whether you’re evaluating a company’s stock price or valuing a firm for a merger or acquisition, you’ll be in a better position after reading this book. \u003c\/p\u003e\u003cp\u003eThe book is written from the premise that most firms attempt to minimize the cost of raising capital by portraying themselves, through their financial statements, in the most favorable light possible. It teaches the strategies that companies use—and for which you must be on guard—to highlight or minimize specific aspects of their financial position. \u003c\/p\u003e\u003cp\u003eYou’ll learn how to effectively evaluate financial statements in volatile markets, read valuable new case studies on fraudulent financial reporting, see tips for maximizing the accuracy of forecasts, use a structured approach to credit and equity evaluation, and discover how earnings can be exaggerated or fabricated. \u003c\/p\u003e\u003cp\u003ePerfect for professional securities analysts and investors, \u003ci\u003eFinancial Statement Analysis, Fifth Edition\u003c\/i\u003e will also earn a place in the libraries of undergraduate and graduate students in finance and business seeking a one-stop resource that examines how to understand and interpret complex financial statements.  \u003c\/p\u003e\u003cp\u003ePRAISE FOR \u003cb\u003eFINANCIAL STATEMENT ANALYSIS,\u003c\/b\u003e FIFTH EDITION\u003c\/p\u003e \u003cp\u003e“Anyone can get lucky in the short term, but to succeed in the long term requires expert financial skills. There is no better guide than Marty Fridson.” \u003c\/p\u003e\u003cp\u003e\u003cb\u003e—John Paulson,\u003c\/b\u003e President, Paulson \u0026amp; Co. \u003c\/p\u003e\u003cp\u003e“Read \u003ci\u003eFinancial Statement Analysis\u003c\/i\u003e and avoid getting duped by financial shenanigans. This book will protect you and your investments.” \u003c\/p\u003e\u003cp\u003e\u003cb\u003e— Wesley R. Gray, PhD, CEO \u003c\/b\u003eof Alpha Architect, and co-author of\u003ci\u003e Quantitative Value\u003c\/i\u003e and \u003ci\u003eQuantitative Momentum\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eFinancial Statement Analysis\u003c\/i\u003e is an almost indispensable book for portfolio managers, securities analysts, and businessmen who want deep insights into how financial statements can be misleading and how they can be helpful in understanding the true strengths and weaknesses of companies. The book should be required reading for all students interested in careers in finance or general business.” \u003c\/p\u003e\u003cp\u003e\u003cb\u003e— Edgar Wachenheim III, CEO,\u003c\/b\u003e founder, and chairman of Greenhaven Associates; author of \u003ci\u003eCommon Stocks and Common Sense: The Strategies, Analyses, Decisions, and Emotions of a Particularly Successful Value Investor\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e“Once again, Fridson and Alvarez provide analysts and investors with the necessary, but all too often overlooked truth about how to approach financial statement and corporate profit analysis. Anyone who wants to understand business should study the lessons in this book.” \u003c\/p\u003e\u003cp\u003e\u003cb\u003e—David Trainer,\u003c\/b\u003e CEO, New Constructs \u003c\/p\u003e\u003cp\u003e“Most financial analysis books are written by academics with limited to no real-life experience. This book is unique since it clearly reflects the extensive practical experience of the authors, along with their knowledge of relevant research. I particularly liked the chapters on data reliability, M\u0026amp;As, fraud, forecasting, and credit analysis. This book is at the top of financial analysis books available, to be used as a text in university financial analysis courses, as well as a source of knowledge to investment professionals.” \u003c\/p\u003e\u003cp\u003e\u003cb\u003e— Baruch Lev, \u003c\/b\u003ePhilip Bardes Professor of Accounting and Finance, New York University; author of\u003ci\u003e The End of Accounting and the Path Forward for Investors and Managers\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e“Over my decades of involvement with high-yield bonds, Marty Fridson has been the leading speaker of truth. As he so accurately states in \u003ci\u003eFinancial Statement Analysis\u003c\/i\u003e, the credit investor is required to engage in a game of cat-and-mouse with company’s management intent on minimizing their cost of capital by putting a positive gloss on their financial statements. \u003ci\u003eThe Fifth Edition\u003c\/i\u003e of Marty’s terrific book is the bible on how to detect and deal with these efforts.” \u003c\/p\u003e\u003cp\u003e\u003cb\u003e—Howard Marks,\u003c\/b\u003e Co-Chairman, Oaktree Capital Management\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989212348645,"sku":"NP9781119457145","price":90.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119457145.jpg?v=1761783228","url":"https:\/\/k12savings.com\/products\/financial-statement-analysis-isbn-9781119457145","provider":"K12savings","version":"1.0","type":"link"}