Financial Statement Analysis and Security Valuation (Hardcover)

by Stephen Penman (Author) "Financial Statements are the primary information that firms publish about themselves, and investors are the primary users of financial statements..." (more)
Key Phrases: residual operating income, net financial obligations, net operating assets, Dell Computer, United States, Home Depot (more...)

Editorial Reviews

Product Description
This book describes valuation as an exercise in financial statement analysis. Students learn to view a firm through its financial statements and to carry out the appropriate financial statement analysis to value the firm's debt and equity. The book takes an activist approach to investing, showing how the analyst challenges the current market price of a share by analyzing the fundamentals. With a careful assessment of accounting quality, accounting comes to life as it is integrated with the modern theory of finance to develop practical analysis and valuation tools for active investing.

About the Author
Stephen Penman is the George O. May Professor and the Morgan Stanley Research Scholar in the Graduate School of Business, Columbia University. He also serves as co-director of Columbia's Center for Excellence in Accounting and Security Analysis. Prior to his appointment at Columbia in 1999, Stephen Penman was the L.H. Penny Professor in the Walter A. Haas School of Business at the University of California at Berkeley. From 1990-95 he served a Chairman of the Professional Accounting Program and Chairman of the Accounting Faculty at Berkeley. He also initiated and chaired Berkeley's Annual Conference on Financial Reporting. He has served as a Visiting Professor at Columbia University and the London Business School of Economic. Professor Penman received a first-class honors degree in Commerce from the University of Queensland, Australia, and M.B.A. and Ph.D. degrees from the University of Chicago. His research is concerned with the valuation of equity and the role of accounting information in security analysis. He has published widely in finance and accounting journals and has conducted seminars on fundamental analysis and equity evaluation for academic and professional audience. In 1991 he was awarded the Notable Contribution to Accounting Literature Award by the American Accounting Association and the American Institute of Certified Public Accountants, and in 2002 he was awarded the American Accounting Association and Deloitte & Touche Wildman Medal for his book, Financial Statement Analysis and Security Valuation, published by McGraw-Hill/Irwin. He is managing editor of the Review of Accounting Studies and is on the editorial board of the Schmalenbach Business Review.

Product Details

• Hardcover: 800 pages
• Publisher: McGraw-Hill/Irwin; 3 edition (January 30, 2006)
• Language: English
• ISBN-10: 0073127132
• ISBN-13: 978-0073127132
• Product Dimensions: 10 x 8 x 1.4 inches
• Shipping Weight: 3.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars See all reviews (13 customer reviews)
• Amazon.com Sales Rank: #435,875 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

25 of 25 people found the following review helpful:

5.0 out of 5 stars Excellent!, August 21, 2003

By	Charles R. Williamson (Helena, MT USA) - See all my reviews (REAL NAME)

This review is from: Financial Statement Analysis and Security Valuation (Hardcover)

I've studied innumerable books on Security Analysis, but have yet to find one that satisfied my desire to fully integrate financial statement analysis with valuation--until now! Penman's book does an excellent job of presenting all the various valuation methods and critiquing the strengths and weaknesses of each one. He does a superb job of showing the relationship between cash flow and accrual accounting and how each relates to valuation. He also shows how corporate strategy affects both the financials and valuation and how to do decent pro formas. For the studious stock analyst, this book is well worth the extra time required to digest its many insights. I rate this book second only to the original Graham and Dodd's Security Analysis.

17 of 17 people found the following review helpful:

5.0 out of 5 stars Best Fundamental Analysis Textbook , September 19, 2004

By	Andrew Berens (New Orleans, LA USA) - See all my reviews (REAL NAME)

This review is from: Financial Statement Analysis and Security Valuation (Hardcover)

I must first disclose that I am a student in Professor Penman's class at Columbia, therefore I may have some insights and access to items that other readers may not have. Nonetheless, this textbook is amazing! I am in my last 2 electives before graduating from a dual MBA program at Columbia/LBS, and this textbook and class are "pulling everything together." I have taken 5 finance courses and 3 accounting classes and thus, have a pretty good background in finance/accounting, despite being a physician with no practical experience in the financial services industry (yet).

THE BOOK: What I have found different about this text book and every other finance/valuation textbook I have used in my studies including Brealey and Myers (the finance bible)is that it handles both the broad, conceptual aspects and the nuts-and-bolts valuation tools extremely well. Penman is able to start with a broad concept and then introduce valuation tools/techniques that build on these concepts. This makes it easier to understand and remember the valuation process (at least for me). The graphs and diagrams are equally helpful (for a change) and re-enforce the textual information. In contrast, the McKinsey valuation textbook (bible #2) is good on the conceptual aspects, but lacks tremendously in the detailed analysis sections. The additional workbook for the McKinsey book fails miserably as well. This textbook has it all, and provides an excellent framework and tool set to enter the financial services industry.

19 of 22 people found the following review helpful:

1.0 out of 5 stars Incomplete, May 12, 2007

By	MD, MBA "Investment hobbyist" - See all my reviews

The book itself is great. I bought it with the idea that I would read it and teach myself the material since completing an MBA two years ago. I was denied access to solutions for the exercises and other resources reserved for instructors and students in degree programs. All information provided to instructors was denied to me by the publisher. For the money spent on this volume, all of the educational resources should be made available either through instructors in formalized degree programs or by some other means to people like myself not in degree programs. Otherwise, this text should not be made available to the general public on Amazon. That stated, the book itself is superb...if you want to read it like a novel.