International Financial Statement Analysis / Edition 2

International Financial Statement Analysis / Edition 2

by Thomas R. Robinson, Elaine Henry, Wendy L. Pirie, Michael A. Broihahn
     
 

View All Available Formats & Editions

ISBN-10: 0470916621

ISBN-13: 9780470916629

Pub. Date: 05/01/2012

Publisher: Wiley

Part of the CFA Institute Investment Series, International Financial Statement Analysis, Second Edition is designed to help both established and aspiring financial professionals effectively evaluate financial statements in today's global markets. Financial statement analysis is an important tool for gaining insights into the true financial condition of a company,

Overview

Part of the CFA Institute Investment Series, International Financial Statement Analysis, Second Edition is designed to help both established and aspiring financial professionals effectively evaluate financial statements in today's global markets. Financial statement analysis is an important tool for gaining insights into the true financial condition of a company, allowing you to make accurate valuations for investment, lending, or merger and acquisition purposes.

Written by the distinguished team of Thomas Robinson, Elaine Henry, Wendy Pirie, and Michael Broihahn, along with a number of experienced contributors, the book is a comprehensive compilation of expert wisdom that gives you everything you need to make intelligent financial decisions in an uncertain global economic climate.

Designed to help you understand the practical challenges of working with financial statements, the book covers the mechanics of the accounting process, which is the foundation for financial reporting, and the differences and similarities in income statements, balance sheets, and cash flow statements around the world. Other topics addressed include how to assess the implications of any financial statement element or transaction, how different financial statement analysis techniques can provide valuable clues into a company's operations and risk characteristics, and more. Fully revised and updated, this Second Edition features new standards and methods for statement analysis in a post-crisis world.

To enhance your understanding of the tools and techniques presented here, pick up the International Financial Statement Analysis Workbook, Second Editon. This companion guide contains carefully constructed problems with detailed solutions as well as concise learning outcome statements and summary chapter overviews.

International Financial Statement Analysis, Second Edition is a straightforward and highly accessible resource for anyone looking to accurately assess the true financial condition of a company, offering a detailed look at how this topic can be understood in a global context and applied around the world.

Product Details

ISBN-13:
9780470916629
Publisher:
Wiley
Publication date:
05/01/2012
Series:
CFA Institute Investment Series, #39
Pages:
1040
Product dimensions:
7.30(w) x 10.10(h) x 1.80(d)

Table of Contents

Foreword xvii

Preface xix

Acknowledgments xxiii

About the CFA Institute Investment Series xxv

CHAPTER 1 Financial Statement Analysis: An Introduction 1

Learning Outcomes 1

1. Introduction 1

2. Scope of Financial Statement Analysis 2

3. Major Financial Statements and Other Information Sources 7

4. Financial Statement Analysis Framework 27

4.5. Develop and Communicate Conclusions/Recommendations 30

4.6. Follow-Up 31

5. Summary 31

Problems 33

CHAPTER 2 Financial Reporting Mechanics 35

Learning Outcomes 35

1. Introduction 36

2. The Classification of Business Activities 36

3. Accounts and Financial Statements 37

4. The Accounting Process 46

5. Accruals and Valuation Adjustments 62

6. Accounting Systems 65

7. Using Financial Statements in Security Analysis 67

8. Summary 69

Appendix 2A: A Debit/Credit Accounting System 69

Problems 85

CHAPTER 3 Financial Reporting Standards 89

Learning Outcomes 89

1. Introduction 90

2. The Objective of Financial Reporting 90

3. Standard-Setting Bodies and Regulatory Authorities 93

4. Convergence of Global Financial Reporting Standards 102

5. The International Financial Reporting Standards Framework 106

6. Effective Financial Reporting 118

7. Comparison of IFRS with Alternative Reporting Systems 120

8. Monitoring Developments in Financial Reporting Standards 122

9. Summary 127

Problems 129

CHAPTER 4 Understanding Income Statements 133

Learning Outcomes 133

1. Introduction 134

2. Components and Format of the Income Statement 135

3. Revenue Recognition 140

4. Expense Recognition 152

5. Nonrecurring Items and Nonoperating Items 163

6. Earnings per Share 169

7. Analysis of the Income Statement 178

8. Comprehensive Income 183

9. Summary 186

Problems 188

CHAPTER 5 Understanding Balance Sheets 193

Learning Outcomes 193

1. Introduction 193

2. Components and Format of the Balance Sheet 194

3. Current Assets and Current Liabilities 199

4. Noncurrent Assets 210

5. Noncurrent Liabilities 222

6. Equity 224

7. Analysis of the Balance Sheet 229

8. Summary 240

Problems 242

CHAPTER 6 Understanding Cash Flow Statements 245

Learning Outcomes 245

1. Introduction 246

2. Components and Format of the Cash Flow Statement 247

3. The Cash Flow Statement: Linkages and Preparation 261

4. Cash Flow Statement Analysis 277

5. Summary 290

Problems 291

CHAPTER 7 Financial Analysis Techniques 297

Learning Outcomes 297

1. Introduction 297

2. The Financial Analysis Process 298

3. Analytical Tools and Techniques 302

4. Common Ratios Used in Financial Analysis 319

5. Equity Analysis 348

6. Credit Analysis 353

7. Business and Geographic Segments 356

8. Model Building and Forecasting 360

9. Summary 360

Problems 361

CHAPTER 8 Financial Statement Analysis: Applications 369

Learning Outcomes 369

1. Introduction 369

2. Application: Evaluating Past Financial Performance 370

3. Application: Projecting Future Financial Performance 379

4. Application: Assessing Credit Risk 389

5. Application: Screening for Potential Equity Investments 393

6. Analyst Adjustments to Reported Financials 397

7. Summary 413

Problems 413

CHAPTER 9 Inventories 417

Learning Outcomes 417

1. Introduction 417

2. Cost of Inventories 419

3. Inventory Valuation Methods 420

4. The LIFO Method 429

5. Inventory Method Changes 440

6. Inventory Adjustments 441

7. Evaluation of Inventory Management 448

8. Summary 462

Problems 463

CHAPTER 10 Long-Lived Assets 479

Learning Outcomes 479

1. Introduction 480

2. Acquisition of Long-Lived Assets 481

3. Depreciation and Amortization of Long-Lived Assets 498

4. The Revaluation Model 508

5. Impairment of Assets 512

6. Derecognition 515

7. Presentation and Disclosures 517

8. Investment Property 528

9. Leasing 531

10. Summary 553

Problems 555

CHAPTER 11 Income Taxes 567

Learning Outcomes 567

1. Introduction 568

2. Differences between Accounting Profit and Taxable Income 568

3. Determining the Tax Base of Assets and Liabilities 574

4. Temporary and Permanent Differences between Taxable and Accounting Profit 579

5. Unused Tax Losses and Tax Credits 584

6. Recognition and Measurement of Current and Deferred Tax 585

7. Presentation and Disclosure 589

8. Comparison of IFRS and U.S. GAAP 595

9. Summary 599

Problems 599

CHAPTER 12 Noncurrent (Long-Term) Liabilities 605

Learning Outcomes 605

1. Introduction 605

2. Bonds Payable 606

3. Leases 625

4. Introduction to Pensions and Other Postemployment Benefits 644

5. Evaluating Solvency: Leverage and Coverage Ratios 648

6. Summary 651

Problems 653

CHAPTER 13 Employee Compensation: Postemployment and Share-Based 657

Learning Outcomes 657

1. Introduction 658

2. Pensions and Other Postemployment Benefits 658

3. Share-Based Compensation 699

4. Summary 705

Problems 707

CHAPTER 14 Intercorporate Investments 717

Learning Outcomes 717

1. Introduction 717

2. Basic Corporate Investment Categories 718

3. Investments in Financial Assets 720

4. Investments in Associates 729

5. Joint Ventures 742

6. Business Combinations 746

7. Variable Interest and Special Purpose Entities 764

8. Summary 773

Problems 775

CHAPTER 15 Multinational Operations 785

Learning Outcomes 785

1. Introduction 785

2. Foreign Currency Transactions 786

3. Translation of Foreign Currency Financial Statements 800

4. Summary 843

Problems 845

CHAPTER 16 Evaluating Financial Reporting Quality 853

Learning Outcomes 853

1. Introduction 853

2. Discretion in Accounting Systems 854

3. Financial Reporting Quality: Definitions, Issues, and Aggregate Measures 863

4. A Framework for Identifying Low-Quality Financial Reporting 881

5. The Implications of Fair Value Reporting for Financial Reporting Quality: A Brief Discussion 915

6. Summary 915

Problems 917

CHAPTER 17 Integration of Financial Statement Analysis Techniques 921

Learning Outcomes 921

1. Introduction 921

2. Case Study 1: Long-Term Equity Investment 923

3. Case Study 2: Off-Balance Sheet Leverage from Operating Leases 953

4. Case Study 3: Anticipating Effects of Changes in Accounting Standards 957

5. Summary 962

Problems 963

Glossary 969

References 981

About the Authors 983

About the CFA Program 987

Index 989

Customer Reviews

Average Review:

Write a Review

and post it to your social network

     

Most Helpful Customer Reviews

See all customer reviews >