Foundation for Effective Financial Statement Analysis --
Overview of Financial Reporting and Financial Statement Analysis --
Learning Objectives --
Overview of Financial Statement Analysis --
Identify the Industry Economic Characteristics --
Tools for Studying Industry Economics --
Value Chain Analysis --
Porter's Five Forces Classification --
Economics Attributes Framework --
Identify the Company Strategy --
Framework for Strategy Analysis --
Application of Strategy Framework to Coke --
Principal Financial Statements and Notes --
Balance Sheet --
Measuring Financial Position --
Income Statement --
Measuring Operating Performance --
Statement of Cash Flows --
Summary of Financial Statements and Notes --
Profitability and Risk Analysis --
Tools of Profitability and Risk Analysis --
Valuation of Firms --
Price-Earnings Ratio --
Market-to-Book-Value Ratio --
Role of Financial Statement Analysis in an Efficient Capital Market --
Sources of Financial Statement Information --
Problems and Cases --
Nike: Somewhere Between a Swoosh and a Slam Dunk --
Income Flows Versus Cash Flows: Key Relationships in Understanding the Dynamics of a Business --
Learning Objectives --
Income Flows, Cash Flows, and Life Cycle Relations --
Net Income and Cash Flow from Operations --
Relationships of Cash Flows from Operating, Investing, and Financing Activities --
Illustrations of Cash Flow Relations --
Preparing the Statement of Cash Flows --
Algebraic Formulation --
Classifying Changes in Balance Sheet Accounts --
Illustration of Procedure for Preparing Cash Flow Statement --
Problems and Cases --
W.T. Grant Co. --
Learning Objectives --
Profitability Analysis --
Rate of Return on Assets --
Disaggregating ROA --
Analyzing the Profit Margin --
Analyzing Assets Turnover --
Analysis of Segment Data --
Rate of Return on Common Shareholders' Equity --
Risk Analysis --
Short-Term Liquidity Risk --
Long-Term Solvency Risk --
Interpreting Financial Statement Ratios --
Comparisons with Corresponding Ratios of Earlier Periods --
Comparisons with Corresponding Ratios of Other Firms --
Earnings Per Common Share --
Problems and Cases --
Profitability and Risk Analysis of Wal-Mart Stores --
Specialty Retailing Industry Analysis: The Gap and the Limited --
Impact of Generally Accepted Accounting Principles on Profitability and Risk Analysis --
Relevant Financial Statement Data for Analysis --
Learning Objectives --
The Raw Data of Financial Statements --
Reporting Earnings and Economic Value-Added --
Earnings Sustainability --
Discontinued Operations --
Extraordinary Items --
Changes in Accounting Principles --
Impairment Losses on Long-Lived Assets --
Restructuring Charges --
Changes in Estimates --
Gains and Losses from Peripheral Activities --
Management's Analysis of Operations --
Summary of Earnings Sustainability --
Earnings Measurement and Management --
Earnings Measurement --
Earnings Management --
Restated Financial Statement Data --
Account Classification Differences --
Reporting Period Differences --
Financial Reporting Worldwide --
Problems and Cases --
International Paper: A Recurring Dilemma --
Tanaguchi Corporation --
Part A --
Unconsolidated Financial Statements for Tanaguchi Corporation --
Comparison of U.S. and Japanese GAAP --
Tanaguchi Corporation --
Part B --
Generally Accepted Accounting Principles: Income Recognition and Asset Valuation --
Learning Objectives --
Income Recognition --
Income Recognition and Earnings Management --
Criteria for Revenue Recognition --
Criteria for Expense Recognition --
Application of Revenue and Expense Recognition Criteria --
Income Recognition for Long-Term Contractors --
Revenue Recognition When Cash Collectibility Is Uncertain --
Disclosure of Revenue Recognition Method --
Inventory Cost Flow Assumption --
FIFO --
LIFO --
Weighted Average --
Conversion from LIFO to FIFO --
Stock Price Reaction to Changes in Inventory Cost Flow Assumption --
Earnings Sustainability and the Cost Flow Assumption --
Accounting for Fixed Assets --
Asset Valuation --
Depreciable Life --
Depreciation Method --
Impairment of Long-Lived Assets --
Earnings Sustainability and Fixed Asset Reporting --
Accounting for Intangible Assets --
Research and Development Costs --
Software Development Costs --
Goodwill --
Earnings Sustainability and Intangible Asset Reporting --
Valuing Intangibles --
Is It Possible? --
Accounting for the Effects of Changing Prices --
Problems and Cases --
Arizona Land Development Company --
Chiron Corporation --
An R&D Puzzle --
Corporation Industrial Sanluis: Coping with Changing Prices --
America Online: Online or Off-Track --
Generally Accepted Accounting Principles: Liability Recognition and Related Expenses --
Learning Objectives --
Principles of Liability Recognition --
Obligations with Fixed Payment Dates and Amounts --
Obligations with Fixed Payment Amounts but Estimated Payment Dates --
Obligations with Estimated Payment Dates and Amounts --
Obligations Arising from Advances from Customers on Unexecuted Contracts and Agreements --
Obligations Under Mutually Unexecuted Contracts --
Contingent Obligations --
Controversial Issues in Liability Recognition --
Issuance of Hybrid Securities --
Off-Balance-Sheet Financing Arrangements --
Derivative Instruments --
Principles of Liability Valuation --
Leases --
Operating Lease Method --
Capital Lease Method --
Choosing the Accounting Method --
Effects on Lessor --
Lease Accounting for Tax Purposes --
Converting Operating Leases to Capital Leases --
Retirement Benefits --
Pensions --
Postretirement Benefits Other Than Pensions --
Income Taxes --
Overview Of Income Tax Accounting --
Required Income Tax Disclosures --
Assessing a Firm's Tax Position --
Income Tax Disclosures --
Is the Deferred Tax Liability Really a Liability? --
Understanding Reserves in the Financial Statements --
Nature of a Reserve Account --
Use of Reserve Accounts --
Summary of Reserves --
Problems and Cases --
American Airlines and United Airlines: A Pension for Debt --
Sun Microsystems: A Not-Too-Taxing Experience --
CIFRA: Remodeling the Financial Statements --
Generally Accepted Accounting Principles: Intercorporate Entities --
Learning Objectives --
Corporate Acquisitions --
Purchase Method --
Pooling of Interests Method --
Criteria for Pooling of Interests --
Purchase versus Pooling of Interest Reporting: Which Is Preferable to Analysts? --
Corporate Acquisitions and Income Taxes --
Corporate Disclosures on Acquisitions --
Investments in Securities --
Types of Investments --
Minority, Passive Investments --
Minority, Active Investments --
Majority, Active Investments --
Joint Venture Investments --
Income Tax Consequences of Investments in Securities --
Foreign Currency Translation --
Functional Currency Concept --
Translation Methodology --
Foreign Currency Is Functional Currency --
Translation Methodology --
U.S. Dollar Is Functional Currency --
Implications of Functional Currency Determination --
Interpreting Financial Statement Disclosures --
Foreign Currency Translation and Income Taxes --
Segment Reporting --
Definition of Segments --
Transfer Pricing and Treatment of Central Corporate Expenses --
Segments Items Disclosed --
Problems and Cases --
Fisher Corporation --
Clark Equipment Company: Analyzing a Joint Problem --
Loucks Corporation: Obtaining Security in Translation --
Exploring Profitability and Risk Analysis in More Depth --
Profitability Analysis: An Extended Look --
Learning Objectives --
Rate of Return on Assets --
Interpreting the Rate of Return on Assets --
Relating ROAs and Value Chain Analysis --
Supplementing ROAs in Profitability Analysis --
Rate of Return on Common Shareholders' Equity --
Behavior of ROCE --
Problems and Cases --
Computer Workstation Industry Analysis: Hewlett-Packard and Sun Microsystems --
Wireless Telecommunications Industry Analysis: Motorola, Nokia, and Ericsson --
Risk Analysis: An Extended Look --
Learning Objectives --
Definition of Risk --
Analyzing Credit Risk --
Sources of Debt Financing --
The C's of Credit Risk Analysis --
Summary of Credit Risk Analysis --
Analyzing Bankruptcy Risk --
The Bankruptcy Process --
Models of Bankruptcy Prediction --
Application of Bankruptcy Prediction Models to W.T. Grant Company --
Other Methodological Issues in Bankruptcy Prediction Research --
Synthesis of Bankruptcy Prediction Research --
Market Risk --
Problems and Cases --
Massachusetts Stove Company --
Bank Lending Decision --
Fly-by-Night International Group: Can This Company Be Saved? --
Millennial Technologies: Apocalypse Now --
Kroger Company: Risky Times --
Financial Statement Analysis and Valuation --
Pro Forma Financial Statements --
Learning Objectives --
Preparing Pro Forma Financial Statements --
Project Sales and Other Revenues --
Project Operating Expenses --
Project the Assets on the Balance Sheet --
Project Liabilities and Shareholders' Equity --
Project the Cost of Financing, Income Tax Expense, and the Change in Retained Earnings --
Project the Statement of Cash Flows --
Analyzing Pro Forma Financial Statements --
Designing a Computer Spreadsheet for Pro Forma Financial Statements --
Problems and Cases --
McDonald's Corporation --
A Franchising Experience --
Massachusetts Stove Company: Analyzing Strategic Options --
Valuation: Cash Flow-Based Approaches --
Learning Objectives --
Rationale for Cash Flow-Based Valuation --
Overview of Cash Flow-Based Valuation --
Periodic Cash Flows --
Residual Value --
Cost of Capital --
Illustrations of Cash Flow-Based Valuation --
Valuation of a Single Project --
Valuation of Coke --
Evaluation of Present Value of Cash Flows Valuation Method --
Problems and Cases --
Holmes Corporation: LBO Valuation --
Rodriguez Home Center, Inc.: Equity Buyout Valuation --
Valuation: Earnings-Based Approaches --
Learning Objectives --
Price-Earnings (P-E) Ratios --
Development of Theoretical Model --
Theoretical versus Actual P-E Ratios --
Application of Theoretical P-E Model --
Summary of P-E Ratio Price to Book Value (P-BV) Ratios --
Development of Theoretical Model --
Application of Theoretical Model --
Using P-E Ratios and P-BV Ratios of Comparable Firms --
Summary Comments on Valuation --
Reconciling Academic Research with the Work of the Security Analyst --
Level of Aggregation Issue --
Theory Development and Practice Feed One Another --
Does the Theory of Capital Market Efficiency Get in the Way? --
Problems and Cases --
Revco D.S., Inc. --
Kleen Cleaning Services: Pricing an Initial Public Offering --
Financial Statements for the Coca-Cola Company and Subsidiaries --
Financial Review for the Coca-Cola Company and Subsidiaries Incorporating Management's Discussion and Analysis --
Output of Financial Statement Analysis Package (FSAP) for the Coca-Cola Company and Subsidiaries