Customer Reviews

Financial Fine Print: Uncovering a Company's True Value

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"Financial Fine Print", in my opinion, provides insufficient analytically challenging insights for those who work in the financial service industry, mainly as an Analysts or Portfolio Managers. However, for those who new to the financial statement / analysis process, the book is a decent primer to understand the importance of financial reports (i.e. footnotes). The biggest disappointment about the book was that it was over-hyped. The book not only read like it was hastily assembled but felt like a 30-page pamphlet of footnote tidbits stretched to 173 pages.

Firstly, I completely disagree with the subtitle of the book: "Uncovering a Company's True Value" as it is misleading. Gaining information from Ms. Leder's book will not result in uncovering a company's **true** value. The book will allow the novice or untrained Analysts / PMs to focus on areas that may shed more light on the company's financial operating results, financial condition, and/or cash flow generating abilities. However, such cursory coverage of said materials is insufficient to arrive at a company's **true** value.

Secondly, the writer fails to fully understand the analytics related to a majority of the subject matters. Allow me to use Chapter 8 that addresses off-balance obligations. On page 133, the writer describes a "Synthetic Lease" but fails to explain or differentiate the lease from any other FASB #13 operating lease. Second, on page 130, the writer tries to educate the reader on the importance of off-balance liabilities with the following remark: "... is to imagine how your bank account balance would improve if you didn't have to account for the monthly mortgage payment." However, her example is faulty and dangerously misleading. If a company has an off-balance sheet operating lease, the reader ought to see the rental (or lease) expense in the income statement. Had the company chose to own the asset outright, the reader would see depreciation (and possibly interest) expense in lieu of the rental expense, other things being equal. That is to if someone didn't account for his "monthly mortgage payment," then common sense would dictate that someone is "renting" his place.

Lastly, the writer tries to add credibility to her work by randomly inserting quotes from a limited number of "experts," that tends to get recycled through-out the book. While some of the people mentioned in the book are highly respected in the industry (i.e. Pat McConnell and David Zion), it was disappointing to find out Ms. Leder did not interview some of the leading researchers from the accounting academia. In fairness, Ms. Leder did provide some accounting research, albeit woefully inadequate for a book of this scope.

In summary, Ms. Leder's book is great for a novice who wants to understand the role footnotes play in financial statement analysis. However, her book was over-hyped for the more experienced or serious students of financial statement analysis.

Is there any way an ordinary investor can protect themselves from shady corporate accounting? YES!! Michelle Leder's book Financial Fineprint has given me the tools to become a better investor.

Not only does she do an excellent job of breaking down annual reports and SEC filings in a very organized and clearly written manner , she also provides an invaluable service by guiding the reader through the footnotes of financial statements, pointing out indicators of accounting tricks and obscuring tactics. Ms. Leder gives the average investor the means to find out for themselves about the companies they invest with. I can now spot those Inflated profits, questionable related party transactions, hidden expenses, etc., before I decide to buy a particular stock.

This book is not simply a "How to" book, however, as it is written in a more narrative and reader friendly style, with personal accounts and fun annecdotes.

I highly reccomend this book for anyone who wants to have as much knowledge at their fingertips as possible before making important financial decisions.

In the aftermath of the corporate accounting scandals, it's hard to know what companies to trust enough to put your money behind them. Financial Fine Print has helped me research companies much more thoroughly. By showing me step-by-step methods to dissect the footnotes in the corporations' financial statements and annual reports, I've learned where all of the unflattering yet legally accountable information is usually hidden in order to make better decisions. I heartily recommend this book for any savvy investor who is unwilling to invest in a company without having personally researched it first.

The investment club that I'm in wound up losing a lot of money on Healthsouth, so we've been very cautious over the past year. But with the market rising, we know that all of this caution has wound up costing us money. Luckily, one of our members received Financial Fine Print as a Christmas present this year. Over the past month or so, this book -- now dog-eared -- has made its way to all 15 of us and we now feel as if we're better investors as a result. I finally decided to buy my own copy because I think it's one of the best books available for individual investors who are looking to do their own research on stocks. There's so many great examples of the sorts of things companies try to hide from their investors in their SEC filings -- information investors need to have before they put their money on the line.

One of the things our group has done over the past month is to go back and look at Healthsouth's SEC filings to see if we would have made the same mistakes. Now armed with Ms. Leder's expert advice, we found numerous "red flags" that would have prompted us to sell the stock before Healthsouth's problems became so apparent. Yes, hindsight is always 20-20, so it's easy to say that now. But we all still feel that we've learned so much from this book that we can now invest with a lot more confidence, instead of being pre-occupied with the fear that we're buying another company that's much more interested in enriching its executives at the expense of their shareholders.

Most of the other accounting-related books our group has read -- and we've read a bunch -- all seem to be aimed at a professional audience and can be a bit dry unless you're the type of person who thinks FASB is fascinating. Not this book. Using easy to understand language and examples that help you put the complicated accounting into perspective, this excellent book is an individual investor's best friend!

Financial Fine Print is an essential book for the small investor. It takes the fear and intimidation out of reading financial footnotes. As a CPA I found it very enlightening. It was a quick read and gives the small investor a better understanding of the companies they plan to invest in.

If you're an amateur investor looking to take the next step in your investment education Financial Fineprint is the book for you.

Ms. Leder's easy to read book provides its readers with the tools they need to spot potential red flags contained in the footnotes that accompany all financial statements.

Investors armed with this knowledge should be able to spot potential problems in their existing portfolio and spot potential problems in future investments. This will hopefully save them from painful portfolio losses.

As an investor and equity columnist, I often use 10-K's and 10-Q's to form an opinion on the financial health of companies. I bought Financial Fine Print with the hope it would improve my analyses by helping me tune in on the most important figures and red flags.

Much to my disappointment, this book provided very little help. Many of the chapters were filled with "fluff," discussing trivial details about the history of SEC regulation and not getting to the main points. After reading through entire chapters, only a few (sometimes obvious) financial red flags were covered.

A major problem is that the author does not distinguish between financial chicanery and benign transactions. Particularly the chapters on CEO perks and off-balance sheet entities leave the reader more cognizant of such items, but without any clue how to react to them. Not every company with an off-balance sheet arrangement is on the brink of an Enron-like crisis, but the author might lead you to assume so. With so many references to Enron and Quest, the entire book seems to be written to cash in on their collapse.

I'm not sure what audience this book was written for, whether the author was targeting uninformed home gamers or investors with intermediate/advanced stock market knowledge. It seems to be aimed towards the murky middle of both crowds.

The bottom line is that this book might carry some merit for retail investors just getting their feet wet when it comes to 10-K's. Some of the information may be handy depending on your knowledge level. This is one of those books that you will either love it or hate it.

When the corporate accounting scandals were coming fast and furious in the last two years, one seemed to quickly blur into another-- Enron, Adelphia, Rite-Aid, Tyco, Worldcom etc. etc.--until the whole thing was a steaming mass of financial ruin and wrongdoing beyond comprehension. Michelle Leder has plunged into that morass and come out with a book that that elucidates in clear, conversational prose how these companies bilked investors with a mind-boggling array of accounting shennanigans. Financial Fineprint decodes the arcane language and structure of securities filings to help individual investors spot the red flags that can help them avoid throwing money at the next Enron or Worldcom. Much of that trouble is hidden, of course, in the footnotes, which Leder puts under a powerful magnifying glass to reveal the perils within. I found the chapter on pensions especially eye-opening, a land of accounting make-believe unto itself. A must read for anyone who wants to understand where the money went during the 90s boom and how to avoid a repeat of financial disaster.

Very well written and a good read as far as financial books go. Focus is on investing time and effort in analyzing footnotes in 10K and 10Q statements, a much underappreciated aspect of finding good values and avoiding value pitfalls.

Although this book does great work in stressing the importance of this subject and works as an important motivator, it does not provide lay investor with any new tools or statistical guidelines to uncover a company's value.

If you're the type of investor who loved Quality of Earnings, this is a must read! It's smart and sophisticated, yet easily understandable for even novice investors. By explaining in vivid detail the different "red flags" that investors need to be wary of, the author, who writes from the point-of-view of the average investor, makes her points clearly and concisely.

What's particularly charming about this book, when compared with some of the other accounting-related books out there, is that you don't have to be a CPA or have an MBA or some other advanced degree to understand this book. Yet, the book is sophisticated enough to also be appealing to people who do.

I can't help but wonder now, as proxy and annual report season gets underway, how many investors would find this book incredibly useful. The chapter on related party transactions, which is cleverly titled All in the Family, is worth the book's price alone. For any investor who picks or invests in individual stocks, this is truly a must read!