- Booking deliveries of computer software to resellers as sales, despite undisclosed agreements permitting the return of unsold merchandise for refunds.
- Helping managers to achieve their annual sales targets by announcing a price increase, effective January 2, to induce customers to order before year-end, even though the hike puts the company out of line with the competition.
- Taking credit for volume-based rebates from suppliers before purchases of merchandise reach the level needed to qualify for the rebates.
Fridson and Alvarez do not merely describe and deplore opaque financial reporting practices. They document a number of cases in which analysts successfully anticipated stock and bond price shocks, using financial ratios and publicly available information from outside the statements. The authors also provide practical advice on making financial projections. (Extra Credit, The Journal of Global High Yield Bond Research)
Financial Statement Analysis, by junk bond guru Martin Fridson, is my No. 1 pick for those at an intermediate level. Fridson does a great job of explaining the various forces at work in corporate financial statement preparation, and also has valuable insights into issues such as pro form a income statements and revenue recognition practices. - Street.com
From the Inside Flap
The goal of financial statement analysis is to shed light on the true financial condition of a company so realistic valuations can be determined for investment, lending, or merger and acquisition purposes. This important process has become increasingly complex over the years as corporate financial statements have become more difficult to decipher. But with Financial Statement Analysis, Third Edition, youll learn how to handle the practical challenges that are part of this business.
In Financial Statement Analysis, Third Edition, leading investment authority Martin Fridson returns with NYU Professor Fernando Alvarez to provide the analytical framework you need to scrutinize financial statements, whether youre evaluating a companys stock price or determining valuations for a merger or acquisition. This fully revised and up-to-date Third Edition offers detailed, fresh information that will allow you to evaluate financial statements in todays volatile markets and uncertain economy.
This definitive guide to the analysis and use of financial statements arms investors, money managers, bankers, and financial analysts with:
- Information that will allow you to "read between the lines" of financial statements and help you get past the biased portrait of a companys performance as represented by its financial statements
- Guidelines on how to interpret balance sheets, income statements, and cash flow statements
- A solid understanding of the lifeblood of the capitalist systemprofitsand how earnings can be exaggerated or even fabricated
- Tips for maximizing the accuracy of forecasts and a structured approach to credit and equity evaluation
With expanded coverage that includes merger accounting, pension issues, integrity of audits, and the addition of valuable new case studies, Financial Statement Analysis, Third Edition teaches analysts and professional investors new techniques for understanding and interpreting financial statements that are designed to conceal more than reveal.
Filled with real-life examples and expert advice, this comprehensive guide will motivate you to undertake genuine, goal-oriented analysis instead of simply going through the motions of calculating standard financial statement analysis. Pick up Financial Statement Analysis, Third Edition and you will acquire all the insight and professional know-how you need to find the facts behind the fiction of most corporate financial statements.