NOT IN USE - Custom Financial Statement Analysis and Valuation, 5e (TAMU)
ISBN: | Copyright 2020
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| Financial Statement Analysis & Valuation, 5e (pg. 1.iii) | |
| About the Authors (pg. 1.iii) | |
| Preface (pg. 1.v) | |
| Brief Contents (pg. 1.xiii) | |
| Contents (pg. 1.xiv) | |
| MODULE 1: Framework for Analysis and Valuation (pg. 1.1-1) | |
| Under Armour (pg. 1.1-2) | |
| STEP 1 BUSINESS ENVIRONMENT AND ACCOUNTING (pg. 1.1-5) | |
| REVIEW 1-1 (pg. 1.1-6) | |
| FINANCIAL STATEMENTS: DEMAND AND SUPPLY (pg. 1.1-6) | |
| Demand for Information (pg. 1.1-7) | |
| Supply of Information (pg. 1.1-10) | |
| International Accounting Standards (pg. 1.1-11) | |
| REVIEW 1-2 (pg. 1.1-12) | |
| REVIEW OF FINANCIAL STATEMENTS (pg. 1.1-12) | |
| Balance Sheet (pg. 1.1-13) | |
| Income Statement (pg. 1.1-15) | |
| Statement of Stockholders’ Equity (pg. 1.1-17) | |
| Statement of Cash Flows (pg. 1.1-18) | |
| Information Beyond Financial Statements (pg. 1.1-19) | |
| REVIEW 1-3 (pg. 1.1-20) | |
| ANALYZING THE BUSINESS ENVIRONMENT (pg. 1.1-20) | |
| Analyzing the Value-Chain (pg. 1.1-20) | |
| Five-Forces Analysis of Business Environment (pg. 1.1-20) | |
| SWOT Analysis of Business Environment (pg. 1.1-21) | |
| Analyzing Competitive Advantage (pg. 1.1-22) | |
| REVIEW 1-4 (pg. 1.1-23) | |
| STEP 2 ADJUSTING AND ANALYZING FINANCIAL DATA (pg. 1.1-24) | |
| Managerial Choices in Financial Reporting (pg. 1.1-24) | |
| Analysis of Return on Assets (pg. 1.1-25) | |
| Analysis of Return on Equity (pg. 1.1-26) | |
| Are Financial Data Relevant? (pg. 1.1-26) | |
| REVIEW 1-5 (pg. 1.1-28) | |
| STEP 3 FORECASTING FINANCIAL NUMBERS (pg. 1.1-28) | |
| STEP 4 BUSINESS VALUATION (pg. 1.1-29) | |
| Financial Statement Analysis in an Efficient Capital Market (pg. 1.1-30) | |
| ANALYZING GLOBAL REPORTS (pg. 1.1-30) | |
| APPENDIX 1A: ACCESSING SEC FILINGS (pg. 1.1-30) | |
| GUIDANCE ANSWERS (pg. 1.1-33) | |
| QUESTIONS (pg. 1.1-33) | |
| MINI EXERCISES (pg. 1.1-34) | |
| EXERCISES (pg. 1.1-36) | |
| PROBLEMS (pg. 1.1-37) | |
| IFRS APPLICATIONS (pg. 1.1-41) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.1-41) | |
| ONGOING ANALYSIS PROJECT (pg. 1.1-42) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.1-43) | |
| MODULE 2: Review of Business Activities and Financial Statements (pg. 1.2-1) | |
| Apple (pg. 1.2-2) | |
| INTERPRETING A BALANCE SHEET (pg. 1.2-3) | |
| Assets (pg. 1.2-3) | |
| REVIEW 2-1 (pg. 1.2-11) | |
| INTERPRETING AN INCOME STATEMENT (pg. 1.2-11) | |
| Recognizing Revenues and Expenses (pg. 1.2-13) | |
| Reporting of Transitory Items (pg. 1.2-14) | |
| Analyzing the Income Statement (pg. 1.2-15) | |
| REVIEW 2-2 (pg. 1.2-16) | |
| INTERPRETING A STATEMENT OF STOCKHOLDERS’ EQUITY (pg. 1.2-16) | |
| REVIEW 2-3 (pg. 1.2-17) | |
| INTERPRETING A STATEMENT OF CASH FLOWS (pg. 1.2-17) | |
| Statement Format and Data Sources (pg. 1.2-17) | |
| REVIEW 2-4 (pg. 1.2-18) | |
| ARTICULATION OF FINANCIAL STATEMENTS (pg. 1.2-19) | |
| Retained Earnings Reconciliation (pg. 1.2-19) | |
| Financial Statement Linkages (pg. 1.2-19) | |
| REVIEW 2-5 (pg. 1.2-21) | |
| ANALYZING TRANSACTIONS AND ADJUSTMENTS (pg. 1.2-21) | |
| Four-Step Accounting Cycle (pg. 1.2-21) | |
| Financial Statement Effects Template (pg. 1.2-21) | |
| Accounting Cycle Step 1—Analyze Transactions and Prepare Entries (pg. 1.2-23) | |
| Applying the Financial Statement Effects Template (pg. 1.2-23) | |
| Applying the Journal Entry and T-Account (pg. 1.2-24) | |
| REVIEW 2-6 (pg. 1.2-26) | |
| ACCOUNTING CYCLE STEP 2—PREPAREACCOUNTING ADJUSTMENTS (pg. 1.2-27) | |
| Prepaid Expenses (pg. 1.2-28) | |
| Unearned Revenues (pg. 1.2-28) | |
| Accrued Expenses (pg. 1.2-29) | |
| Accrued Revenues (pg. 1.2-29) | |
| Accounting Adjustments for Apple (pg. 1.2-30) | |
| REVIEW 2-7 (pg. 1.2-30) | |
| ACCOUNTING CYCLE STEP 3—PREPAREFINANCIAL STATEMENTS (pg. 1.2-30) | |
| REVIEW 2-8 (pg. 1.2-31) | |
| ACCOUNTING CYCLE STEP 4—CLOSE THE BOOKS (pg. 1.2-31) | |
| REVIEW 2-9 (pg. 1.2-32) | |
| ADDITIONAL INFORMATION SOURCES (pg. 1.2-32) | |
| Form 10-K (pg. 1.2-32) | |
| REVIEW 2-10 (pg. 1.2-36) | |
| Form 20-F and Form 40-F (pg. 1.2-34) | |
| Form 8-K (pg. 1.2-34) | |
| Analyst Reports (pg. 1.2-35) | |
| Credit Services (pg. 1.2-35) | |
| Data Services (pg. 1.2-35) | |
| ANALYZING GLOBAL REPORTS (pg. 1.2-36) | |
| APPENDIX 2A: FASB’S FINANCIAL STATEMENT PRESENTATION PROJECT (pg. 1.2-37) | |
| GUIDANCE ANSWERS (pg. 1.2-37) | |
| QUESTIONS (pg. 1.2-38) | |
| MINI EXERCISES (pg. 1.2-38) | |
| EXERCISES (pg. 1.2-40) | |
| PROBLEMS (pg. 1.2-46) | |
| IFRS APPLICATIONS (pg. 1.2-51) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.2-51) | |
| ONGOING ANALYSIS PROJECT (pg. 1.2-52) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.2-52) | |
| MODULE 3: Profitability Analysis and Interpretation (pg. 1.3-1) | |
| Intel (pg. 1.3-2) | |
| RETURN ON EQUITY (ROE) (pg. 1.3-3) | |
| REVIEW 3-1 (pg. 1.3-4) | |
| ROE DISAGGREGATION: DUPONT ANALYSIS (pg. 1.3-4) | |
| REVIEW 3-2 (pg. 1.3-6) | |
| RETURN ON ASSETS AND ITS DISAGGREGATION (pg. 1.3-6) | |
| Analysis of Profitability and Productivity (pg. 1.3-7) | |
| Analysis of Profitability (pg. 1.3-8) | |
| Analysis of Productivity (pg. 1.3-9) | |
| Analysis of Financial Leverage (pg. 1.3-12) | |
| REVIEW 3-3 (pg. 1.3-14) | |
| OPERATING FOCUS ON FINANCIAL CONDITION (pg. 1.3-14) | |
| Net Operating Assets (NOA) (pg. 1.3-15) | |
| REVIEW 3-4 (pg. 1.3-19) | |
| OPERATING FOCUS ON FINANCIAL PERFORMANCE (pg. 1.3-20) | |
| Net Operating Profit After Tax (NOPAT) (pg. 1.3-22) | |
| REVIEW 3-5 (pg. 1.3-24) | |
| RETURN ON NET OPERATING ASSETS (RNOA) (pg. 1.3-24) | |
| REVIEW 3-6 (pg. 1.3-26) | |
| RNOA DISAGGREGATION INTO MARGIN ANDTURNOVER (pg. 1.3-26) | |
| Net Operating Profit Margin (pg. 1.3-26) | |
| Net Operating Asset Turnover (pg. 1.3-26) | |
| Trade-Off between Margin and Turnover (pg. 1.3-27) | |
| REVIEW 3-7 (pg. 1.3-29) | |
| ANALYZING GLOBAL REPORTS (pg. 1.3-29) | |
| APPENDIX 3A: NONOPERATING COMPONENT OF ROE (pg. 1.3-31) | |
| Nonoperating Return (pg. 1.3-31) | |
| Nonoperating Return—with Debt Financing (pg. 1.3-31) | |
| Nonoperating Return—With Debt Financing and Nonoperating Assets (pg. 1.3-32) | |
| Nonoperating Return— Without Debt Financing, but with Nonoperating Assets (pg. 1.3-33) | |
| Nonoperating Return— With Debt Financing, Nonoperating Assets,and Noncontrolling Interest (pg. 1.3-34) | |
| REVIEW 3-8 (pg. 1.3-35) | |
| APPENDIX 3B: LIQUIDITY AND SOLVENCY ANALYSIS (pg. 1.3-36) | |
| Liquidity Analysis (pg. 1.3-36) | |
| Solvency Analysis (pg. 1.3-37) | |
| Vertical and Horizontal Analysis (pg. 1.3-39) | |
| REVIEW 3-9 (pg. 1.3-42) | |
| GUIDANCE ANSWERS (pg. 1.3-42) | |
| QUESTIONS (pg. 1.3-42) | |
| MINI EXERCISES (pg. 1.3-43) | |
| EXERCISES (pg. 1.3-48) | |
| PROBLEMS (pg. 1.3-52) | |
| IFRS APPLICATIONS (pg. 1.3-61) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.3-64) | |
| ONGOING ANALYSIS PROJECT (pg. 1.3-65) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.3-66) | |
| MODULE 4: Credit Risk Analysis and Interpretation (pg. 1.4-1) | |
| HomeDepot (pg. 1.4-2) | |
| MARKET FOR CREDIT (pg. 1.4-3) | |
| Demand for Credit (pg. 1.4-3) | |
| Supply of Credit (pg. 1.4-4) | |
| CREDIT RISK ANALYSIS PROCESS (pg. 1.4-8) | |
| Information for Credit Risk Analysis (pg. 1.4-8) | |
| Chance of Default (pg. 1.4-9) | |
| Loss Given Default (pg. 1.4-11) | |
| REVIEW 4-2 (pg. 1.4-13) | |
| MEASURING CREDIT RISK (pg. 1.4-14) | |
| Adjusting Financial Information (pg. 1.4-14) | |
| Profitability Analysis (pg. 1.4-14) | |
| Coverage Analysis (pg. 1.4-16) | |
| Liquidity Analysis (pg. 1.4-20) | |
| Solvency Analysis (pg. 1.4-21) | |
| REVIEW 4-3 (pg. 1.4-23) | |
| CREDIT RATINGS (pg. 1.4-25) | |
| Importance of Credit Rating (pg. 1.4-26) | |
| How Credit Ratings Are Determined (pg. 1.4-27) | |
| REVIEW 4-4 (pg. 1.4-31) | |
| PREDICTING BANKRUPTCY RISK (pg. 1.4-31) | |
| Altman Z-Score (pg. 1.4-31) | |
| Application of Z-Score (pg. 1.4-32) | |
| Bankruptcy Prediction Errors (pg. 1.4-32) | |
| REVIEW 4-5 (pg. 1.4-33) | |
| APPENDIX 4A: CREDIT RISK ANALYSIS AT TWO MAJOR NRSROs (pg. 1.4-34) | |
| GUIDANCE ANSWERS (pg. 1.4-37) | |
| QUESTIONS (pg. 1.4-38) | |
| MINI EXERCISES (pg. 1.4-38) | |
| EXERCISES (pg. 1.4-40) | |
| PROBLEMS (pg. 1.4-43) | |
| IFRS APPLICATIONS (pg. 1.4-48) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.4-51) | |
| ONGOING ANALYSIS PROJECT (pg. 1.4-51) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.4-52) | |
| MODULE 5: Revenue Recognition and Operating Income (pg. 1.5-1) | |
| Pfizer (pg. 1.5-2) | |
| ANALYZING REVENUE (pg. 1.5-3) | |
| Revenue Recognition Rules (pg. 1.5-4) | |
| Complications of Revenue Recognition (pg. 1.5-5) | |
| Performance Obligations Satisfied Over Time (pg. 1.5-6) | |
| REVIEW 5-1 (pg. 1.5-9) | |
| ANALYZING SALES ALLOWANCES (pg. 1.5-9) | |
| Accounting for Sales Allowances (pg. 1.5-10) | |
| Reporting Sales Allowances (pg. 1.5-11) | |
| Analysis of Sales Allowances (pg. 1.5-11) | |
| REVIEW 5-2 (pg. 1.5-12) | |
| ANALYZING UNEARNED (DEFERRED) REVENUE (pg. 1.5-13) | |
| REVIEW 5-3 (pg. 1.5-14) | |
| FOREIGN CURRENCY EFFECTS ON REVENUE (pg. 1.5-14) | |
| Foreign Currency and Cash Flows (pg. 1.5-15) | |
| Foreign Currency and Income (pg. 1.5-16) | |
| Foreign Currency and Future Results (pg. 1.5-16) | |
| REVIEW 5-4 (pg. 1.5-17) | |
| ANALYZING ACCOUNTS RECEIVABLE (pg. 1.5-17) | |
| Aging Analysis of Receivables (pg. 1.5-18) | |
| Accounting for Accounts Receivable (pg. 1.5-18) | |
| Analysis of Accounts Receivable—Magnitude (pg. 1.5-19) | |
| Analysis of Accounts Receivable—Quality (pg. 1.5-21) | |
| REVIEW 5-5 (pg. 1.5-23) | |
| ANALYZING EXPENSES AND LOSSES (pg. 1.5-24) | |
| Analyze Deductions from Income (pg. 1.5-24) | |
| Analyze Research and Development Expense (pg. 1.5-25) | |
| Analyze Discontinued Operations (pg. 1.5-27) | |
| REVIEW 5-6 (pg. 1.5-29) | |
| PRO FORMA INCOME REPORTING (pg. 1.5-30) | |
| Regulation G Reconciliation (pg. 1.5-30) | |
| SEC Warnings about Pro Forma Numbers (pg. 1.5-31) | |
| Disclosures and Market Assessments (pg. 1.5-31) | |
| REVIEW 5-7 (pg. 1.5-33) | |
| ANALYZING GLOBAL REPORTS (pg. 1.5-34) | |
| GUIDANCE ANSWERS (pg. 1.5-34) | |
| QUESTIONS (pg. 1.5-34) | |
| MINI EXERCISES (pg. 1.5-35) | |
| EXERCISES (pg. 1.5-38) | |
| PROBLEMS (pg. 1.5-44) | |
| IFRS APPLICATIONS (pg. 1.5-50) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.5-52) | |
| ONGOING ANALYSIS PROJECT (pg. 1.5-52) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.5-53) | |
| MODULE 6: Asset Recognition and Operating Assets (pg. 1.6-1) | |
| HomeDepot (pg. 1.6-2) | |
| ANALYZING INVENTORY—COSTING METHODS (pg. 1.6-3) | |
| Capitalization of Inventory Cost (pg. 1.6-3) | |
| Inventory Cost Flows (pg. 1.6-4) | |
| First-In, First-Out (FIFO) (pg. 1.6-5) | |
| Last-In, First-Out (LIFO) (pg. 1.6-5) | |
| Average Cost (AC) (pg. 1.6-6) | |
| Financial Statement Effects of Inventory Costing (pg. 1.6-7) | |
| REVIEW 6-1 (pg. 1.6-8) | |
| ANALYZING INVENTORY—REPORTING (pg. 1.6-8) | |
| Lower of Cost or Market (LCM) (pg. 1.6-8) | |
| LIFO Reserve Adjustments to Financial Statements (pg. 1.6-9) | |
| LIFO Liquidations (pg. 1.6-10) | |
| REVIEW 6-2 (pg. 1.6-12) | |
| ANALYZING INVENTORY—ANALYSIS TOOLS (pg. 1.6-12) | |
| Gross Profit Analysis (pg. 1.6-12) | |
| Days Inventory Outstanding and Inventory Turnover (pg. 1.6-14) | |
| Days Payable Outstanding (pg. 1.6-15) | |
| Cash Conversion Cycle (pg. 1.6-16) | |
| REVIEW 6-3 (pg. 1.6-17) | |
| PPE ASSETS—CAPITALIZATION AND DEPRECIATION (pg. 1.6-17) | |
| Plant and Equipment (pg. 1.6-17) | |
| Research and Development Facilities and Equipment (pg. 1.6-20) | |
| REVIEW 6-4 (pg. 1.6-21) | |
| PPE ASSETS—SALES, IMPAIRMENTS, ANDRESTRUCTURING (pg. 1.6-21) | |
| Asset Sales (pg. 1.6-21) | |
| Asset Impairments (pg. 1.6-23) | |
| Restructuring Costs (pg. 1.6-24) | |
| REVIEW 6-5 (pg. 1.6-28) | |
| PPE ASSETS—ANALYSIS TOOLS (pg. 1.6-29) | |
| PPE Turnover (pg. 1.6-30) | |
| PPE Useful Life (pg. 1.6-31) | |
| PPE Percent Used Up (pg. 1.6-31) | |
| REVIEW 6-6 (pg. 1.6-32) | |
| ANALYZING GLOBAL REPORTS (pg. 1.6-32) | |
| GUIDANCE ANSWERS (pg. 1.6-33) | |
| QUESTIONS (pg. 1.6-34) | |
| MINI EXERCISES (pg. 1.6-34) | |
| EXERCISES (pg. 1.6-37) | |
| PROBLEMS (pg. 1.6-41) | |
| IFRS APPLICATIONS (pg. 1.6-46) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.6-47) | |
| ONGOING ANALYSIS PROJECT (pg. 1.6-47) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.6-48) | |
| MODULE 7: Liability Recognition and Nonowner Financing (pg. 1.7-1) | |
| Verizon (pg. 1.7-2) | |
| ANALYZING ACCRUED LIABILITIES (pg. 1.7-3) | |
| Accrued Liabilities Defined (pg. 1.7-4) | |
| Accruals for Contractual Liabilities—Wages Payable Example (pg. 1.7-4) | |
| Accruals for Contractual Liabilities—Deferred Revenue Example (pg. 1.7-5) | |
| Accruals for Contingent Liabilities Defined (pg. 1.7-5) | |
| Accruals for Contingent Liabilities—Warranties Example (pg. 1.7-5) | |
| REVIEW 7-1 (pg. 1.7-8) | |
| ANALYZING SHORT-TERM DEBT (pg. 1.7-8) | |
| Reporting of Short-Term Debt (pg. 1.7-9) | |
| Current Maturities of Long-Term Debt (pg. 1.7-10) | |
| REVIEW 7-2 (pg. 1.7-11) | |
| ANALYZING LONG-TERM DEBT—PRICING (pg. 1.7-11) | |
| Pricing of Bonds Issued at Par (pg. 1.7-12) | |
| Pricing of Bonds Issued at a Discount (pg. 1.7-12) | |
| Pricing of Bonds Issued at a Premium (pg. 1.7-13) | |
| Effective Cost of Debt (pg. 1.7-13) | |
| REVIEW 7-3 (pg. 1.7-15) | |
| ANALYZING LONG-TERM DEBT—REPORTING (pg. 1.7-15) | |
| Financial Statement Disclosure of Debt Issuance (pg. 1.7-15) | |
| Balance Sheet Reporting (pg. 1.7-16) | |
| Income Statement Reporting (pg. 1.7-17) | |
| Amortization of Discount (pg. 1.7-18) | |
| Amortization of Premium (pg. 1.7-18) | |
| Financial Statement Effects of Bond Repurchase (pg. 1.7-19) | |
| Fair Value Disclosures (pg. 1.7-20) | |
| REVIEW 7-4 (pg. 1.7-21) | |
| ANALYZING THE QUALITY OF DEBT (pg. 1.7-21) | |
| What Determines Credit Ratings? (pg. 1.7-23) | |
| Verizon Credit Rating Example (pg. 1.7-24) | |
| Why Credit Ratings Matter (pg. 1.7-26) | |
| What Are Credit Ratings? (pg. 1.7-22) | |
| Review 7-5 (pg. 1.7-27) | |
| Analyzing Global Reports (pg. 1.7-27) | |
| Appendix 7A: Time Value of Money (pg. 1.7-27) | |
| Present Value Concepts (pg. 1.7-28) | |
| Future Value Concepts (pg. 1.7-32) | |
| Review 7-6 (pg. 1.7-33) | |
| Guidance Answers (pg. 1.7-33) | |
| Questions (pg. 1.7-34) | |
| Mini Exercises (pg. 1.7-34) | |
| Exercises (pg. 1.7-38) | |
| Problems (pg. 1.7-42) | |
| IFRS Applications (pg. 1.7-47) | |
| Analysis Discussion Points (pg. 1.7-50) | |
| Ongoing Analysis Project (pg. 1.7-50) | |
| Solutions to Review Problems (pg. 1.7-51) | |
| MODULE 8: Equity Recognition and Owner Financing (pg. 1.8-1) | |
| Johnson & Johnson (pg. 1.8-2) | |
| STOCKHOLDERS’ EQUITY TERMS (pg. 1.8-3) | |
| Stockholders’ Equity Accounts (pg. 1.8-3) | |
| Statement of Stockholders’ Equity (pg. 1.8-5) | |
| Preferred Stock (pg. 1.8-6) | |
| Common Stock (pg. 1.8-7) | |
| REVIEW 8-1 (pg. 1.8-9) | |
| STOCK TRANSACTIONS (pg. 1.8-9) | |
| Stock Issuance (pg. 1.8-9) | |
| Stock Repurchase (Treasury Stock) (pg. 1.8-10) | |
| REVIEW 8-2 (pg. 1.8-13) | |
| STOCK-BASED COMPENSATION (pg. 1.8-13) | |
| Accounting for Stock-Based Compensation (pg. 1.8-15) | |
| Footnote Disclosures for Stock-Based Compensation (pg. 1.8-16) | |
| REVIEW 8-3 (pg. 1.8-17) | |
| CASH DIVIDENDS (pg. 1.8-18) | |
| Cash Dividend Disclosures (pg. 1.8-18) | |
| Dividend Payout and Yield (pg. 1.8-18) | |
| Cash Dividends Financial Effects (pg. 1.8-18) | |
| REVIEW 8-4 (pg. 1.8-19) | |
| STOCK SPLITS AND STOCK DIVIDENDS (pg. 1.8-20) | |
| Stock Split (pg. 1.8-20) | |
| Stock Dividend (pg. 1.8-20) | |
| REVIEW 8-5 (pg. 1.8-21) | |
| ACCUMULATED OTHER COMPREHENSIVE INCOME (pg. 1.8-22) | |
| AOCI Components (pg. 1.8-22) | |
| AOCI Disclosures and Interpretation (pg. 1.8-22) | |
| REVIEW 8-6 (pg. 1.8-24) | |
| CONVERTIBLE SECURITIES (pg. 1.8-24) | |
| REVIEW 8-7 (pg. 1.8-25) | |
| EARNINGS PER SHARE (EPS) (pg. 1.8-25) | |
| REVIEW 8-8 (pg. 1.8-27) | |
| ANALYZING GLOBAL REPORTS (pg. 1.8-27) | |
| APPENDIX 8A: STOCK-BASED COMPENSATION: REPORTING AND ANALYZING (pg. 1.8-29) | |
| GUIDANCE ANSWERS (pg. 1.8-32) | |
| QUESTIONS (pg. 1.8-32) | |
| MINI EXERCISES (pg. 1.8-33) | |
| EXERCISES (pg. 1.8-36) | |
| PROBLEMS (pg. 1.8-42) | |
| IFRS APPLICATIONS (pg. 1.8-49) | |
| ONGOING ANALYSIS PROJECT (pg. 1.8-53) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.8-53) | |
| MODULE 9: Intercorporate Entities (pg. 1.9-1) | |
| Google (pg. 1.9-2) | |
| ANALYZING INTERCORPORATE INVESTMENTS (pg. 1.9-3) | |
| Passive Investments in Marketable Securities (pg. 1.9-4) | |
| Investments in Debt Securities (pg. 1.9-8) | |
| REVIEW 9-1 (pg. 1.9-9) | |
| ANALYZING EQUITY INVESTMENTS WITH SIGNIFICANT INFLUENCE (pg. 1.9-10) | |
| Accounting for Investments with Significant Influence (pg. 1.9-10) | |
| Equity Method Accounting and ROE Effects (pg. 1.9-12) | |
| REVIEW 9-2 (pg. 1.9-16) | |
| ANALYZING EQUITY INVESTMENTS WITH CONTROL (pg. 1.9-16) | |
| Accounting for Investments with Control (pg. 1.9-17) | |
| REVIEW 9-3 (pg. 1.9-30) | |
| ANALYZING GLOBAL REPORTS (pg. 1.9-30) | |
| APPENDIX 9A: ANALYZING DERIVATIVES (pg. 1.9-31) | |
| Fair Value Hedge Example (pg. 1.9-32) | |
| Cash Flow Hedge Example (pg. 1.9-33) | |
| Analysis of Derivatives (pg. 1.9-35) | |
| REVIEW 9-4 (pg. 1.9-36) | |
| APPENDIX 9B: ANALYZING EQUITY CARVE-O (pg. 1.9-36) | |
| Sell-Offs (pg. 1.9-36) | |
| Spin-Offs (pg. 1.9-37) | |
| Split-Offs (pg. 1.9-38) | |
| Analysis of Equity Carve-Outs (pg. 1.9-39) | |
| REVIEW 9-5 (pg. 1.9-39) | |
| GUIDANCE ANSWERS (pg. 1.9-39) | |
| QUESTIONS (pg. 1.9-40) | |
| MINI EXERCISES (pg. 1.9-40) | |
| EXERCISES (pg. 1.9-43) | |
| PROBLEMS (pg. 1.9-51) | |
| IFRS APPLICATIONS (pg. 1.9-55) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.9-57) | |
| ONGOING ANALYSIS PROJECT (pg. 1.9-58) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.9-59) | |
| MODULE 10: Analyzing Leases, Pensions, and Taxes (pg. 1.10-1) | |
| Southwest & FedEx (pg. 1.10-2) | |
| ANALYZING LEASES (pg. 1.10-3) | |
| Lessee Reporting of Leases (pg. 1.10-3) | |
| New Lease Accounting Rules (pg. 1.10-5) | |
| Footnote Disclosure of Leases (pg. 1.10-6) | |
| Capitalization of Operating Leases (pg. 1.10-6) | |
| REVIEW 10-1 (pg. 1.10-10) | |
| ANALYZING PENSIONS (pg. 1.10-11) | |
| Reporting of Defined Benefit Pension Plans (pg. 1.10-12) | |
| Balance Sheet Effects (pg. 1.10-12) | |
| Income Statement Effects (pg. 1.10-14) | |
| Fair Value Accounting for Pensions (pg. 1.10-16) | |
| Footnote Disclosure—Pension Plan Assets and PBO (pg. 1.10-17) | |
| Footnote Disclosure—Future Cash Flows (pg. 1.10-19) | |
| Footnote Disclosure—Key Assumptions (pg. 1.10-20) | |
| Analysis Implications (pg. 1.10-21) | |
| Other Post-Employment Benefits (OPEB) (pg. 1.10-23) | |
| REVIEW 10-2 (pg. 1.10-24) | |
| ANALYZING INCOME TAXES (pg. 1.10-24) | |
| Timing Differences Create Deferred Tax Assets andLiabilities (pg. 1.10-25) | |
| Disclosures for Income Taxes (pg. 1.10-28) | |
| Analysis of Income Tax Disclosures (pg. 1.10-30) | |
| REVIEW 10-3 (pg. 1.10-32) | |
| ANALYZING GLOBAL REPORTS (pg. 1.10-33) | |
| APPENDIX 10A: LEASE CAPITALIZATION USING A CALCULATOR AND PRESENT VALUE TABLES (pg. 1.10-34) | |
| Lease Capitalization Using Present Value Tables (pg. 1.10-35) | |
| APPENDIX 10B: AMORTIZATION COMPONENT OF PENSION EXPENSE (pg. 1.10-36) | |
| APPENDIX 10C: EXPANDED EXPLANATION OF DEFERRED TAXES (pg. 1.10-37) | |
| GUIDANCE ANSWERS (pg. 1.10-39) | |
| QUESTIONS (pg. 1.10-39) | |
| MINI EXERCISES (pg. 1.10-40) | |
| EXERCISES (pg. 1.10-45) | |
| PROBLEMS (pg. 1.10-52) | |
| IFRS APPLICATIONS (pg. 1.10-61) | |
| ONGOING ANALYSIS PROJECT (pg. 1.10-64) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.10-65) | |
| MODULE 11: Forecasting Financial Statements (pg. 1.11-1) | |
| Procter & Gamble (pg. 1.11-2) | |
| FORECASTING PROCESS (pg. 1.11-3) | |
| REVIEW 11-1 (pg. 1.11-5) | |
| FORECASTING THE INCOME STATEMENT (pg. 1.11-6) | |
| REVIEW 11-2 (pg. 1.11-8) | |
| FORECASTING THE BALANCE SHEET (pg. 1.11-9) | |
| REVIEW 11-3 (pg. 1.11-12) | |
| THE FORECASTED CASH BALANCE (pg. 1.11-12) | |
| REVIEW 11-4 (pg. 1.11-13) | |
| FORECASTING MULTIPLE YEARS AHEAD (pg. 1.11-13) | |
| REVIEW 11-5 (pg. 1.11-15) | |
| REFINING FINANCIAL STATEMENT FORECASTS (pg. 1.11-15) | |
| Company Guidance (pg. 1.11-15) | |
| Segment Data (pg. 1.11-17) | |
| Impact of Acquisitions (pg. 1.11-18) | |
| Impact of Divestitures (pg. 1.11-19) | |
| Reassessing Financial Statement Forecasts (pg. 1.11-19) | |
| REVIEW 11-6 (pg. 1.11-20) | |
| APPENDIX 11A: FORECASTING THE STATEMENT OFCASH FLOWS (pg. 1.11-20) | |
| REVIEW 11-7 (pg. 1.11-22) | |
| APPENDIX 11B: PARSIMONIOUS METHOD FORFORECASTING NOPAT AND NOA (pg. 1.11-22) | |
| Multiyear Forecasting with Parsimonious Method (pg. 1.11-22) | |
| REVIEW 11-8 (pg. 1.11-23) | |
| APPENDIX 11C: MORGAN STANLEY’S FORECAST REPORT ON PROCTER & GAMBLE (pg. 1.11-23) | |
| QUESTIONS (pg. 1.11-44) | |
| MINI EXERCISES (pg. 1.11-45) | |
| EXERCISES (pg. 1.11-51) | |
| PROBLEMS (pg. 1.11-60) | |
| IFRS APPLICATIONS (pg. 1.11-67) | |
| ONGOING ANALYSIS PROJECT (pg. 1.11-68) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.11-68) | |
| MODULE 12: Cost of Capital and Valuation Basics (pg. 1.12-1) | |
| NextEra Energy (pg. 1.12-2) | |
| BASICS OF VALUATION (pg. 1.12-3) | |
| Payoffs from Equity and Debt Instruments (pg. 1.12-4) | |
| Steps in Stock Valuation (pg. 1.12-4) | |
| Intrinsic Value (pg. 1.12-5) | |
| Review of Time Value of Money (pg. 1.12-6) | |
| Valuation of a Debt Instrument (pg. 1.12-9) | |
| Valuation of an Equity Instrument (pg. 1.12-9) | |
| ESTIMATING COST OF CAPITAL (pg. 1.12-10) | |
| Diversifiable and Non-Diversifiable Risk (pg. 1.12-11) | |
| REVIEW 12-1 (pg. 1.12-11) | |
| Cost of Equity Capital Using the Capital Asset Pricing Model (pg. 1.12-12) | |
| Cost of Equity Capital Using a Multi-Factor Model (pg. 1.12-13) | |
| REVIEW 12-2 (pg. 1.12-14) | |
| Cost of Debt Capital (pg. 1.12-14) | |
| REVIEW 12-3 (pg. 1.12-16) | |
| Weighted Average Cost of Capital (pg. 1.12-16) | |
| REVIEW 12-4 (pg. 1.12-17) | |
| DIVIDEND DISCOUNT MODEL (pg. 1.12-17) | |
| Recursive Process of Valuation (pg. 1.12-18) | |
| Framework of the Dividend Discount Model (pg. 1.12-19) | |
| Dividend Discount Model with Constant Perpetuity (pg. 1.12-19) | |
| REVIEW 12-5 (pg. 1.12-20) | |
| Dividend Discount Model with Increasing Perpetuity (pg. 1.12-20) | |
| Issues in Applying the Dividend Discount Model (pg. 1.12-21) | |
| REVIEW 12-6 (pg. 1.12-23) | |
| APPENDIX 12A: ESTIMATING COST OF EQUITY CAPITAL (pg. 1.12-23) | |
| GUIDANCE ANSWERS (pg. 1.12-28) | |
| QUESTIONS (pg. 1.12-28) | |
| MINI EXERCISES (pg. 1.12-28) | |
| EXERCISES (pg. 1.12-29) | |
| PROBLEMS (pg. 1.12-31) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.12-34) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.12-36) | |
| MODULE 13: Cash-Flow-Based Valuation (pg. 1.13-1) | |
| Procter & Gamble (pg. 1.13-2) | |
| EQUITY VALUATION MODELS (pg. 1.13-3) | |
| Dividend Discount Model (pg. 1.13-3) | |
| Discounted Cash Flow Model (pg. 1.13-3) | |
| Residual Operating Income Model (pg. 1.13-4) | |
| Model Equivalency (pg. 1.13-4) | |
| Valuation Model Inputs (pg. 1.13-4) | |
| REVIEW 13-1 (pg. 1.13-5) | |
| DISCOUNTED CASH FLOW (DCF) MODEL (pg. 1.13-5) | |
| DCF Model Structure (pg. 1.13-6) | |
| Steps in Applying the DCF Model (pg. 1.13-7) | |
| Illustrating the DCF Model (pg. 1.13-7) | |
| Extending the DCF Model (pg. 1.13-9) | |
| ANALYZING GLOBAL REPORTS (pg. 1.13-14) | |
| REVIEW 13-2 (pg. 1.13-15) | |
| APPENDIX 13A: P&G FINANCIAL STATEMENTS (pg. 1.13-15) | |
| APPENDIX 13B: DERIVATION OF FREE CASH FLOW FORMULA (pg. 1.13-18) | |
| APPENDIX 13C: DEUTSCHE BANK VALUATION OF P&G (pg. 1.13-18) | |
| Qualitative and Quantitative Summary (pg. 1.13-18) | |
| Financial Statement Forecasts (pg. 1.13-26) | |
| Valuation of Equity (pg. 1.13-29) | |
| Observations on the Analyst Report (pg. 1.13-30) | |
| GUIDANCE ANSWERS (pg. 1.13-30) | |
| QUESTIONS (pg. 1.13-30) | |
| MINI EXERCISES (pg. 1.13-31) | |
| EXERCISES (pg. 1.13-31) | |
| PROBLEMS (pg. 1.13-35) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.13-39) | |
| ONGOING ANALYSIS PROJECT (pg. 1.13-39) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.13-40) | |
| MODULE 14: Operating-Income-Based Valuation (pg. 1.14-1) | |
| Procter & Gamble (pg. 1.14-2) | |
| EQUITY VALUATION MODELS (pg. 1.14-3) | |
| Dividend Discount Model (pg. 1.14-3) | |
| Discounted Cash Flow Model (pg. 1.14-3) | |
| Residual Operating Income Model (pg. 1.14-4) | |
| Model Equivalency (pg. 1.14-4) | |
| Valuation Model Inputs (pg. 1.14-4) | |
| REVIEW 14-1 (pg. 1.14-5) | |
| RESIDUAL OPERATING INCOME (ROPI) MODEL (pg. 1.14-6) | |
| ROPI Model Structure (pg. 1.14-6) | |
| Steps in Applying the ROPI Model (pg. 1.14-7) | |
| Illustrating the ROPI Model (pg. 1.14-8) | |
| Extending the ROPI Model (pg. 1.14-9) | |
| REVIEW 14-2 (pg. 1.14-10) | |
| STEADY STATE IN VALUATION (pg. 1.14-11) | |
| Multi-Year Forecast Precision (pg. 1.14-11) | |
| Achieving Steady State (pg. 1.14-12) | |
| Forecasting Steady State—An Illustration (pg. 1.14-12) | |
| REVIEW 14-3 (pg. 1.14-14) | |
| MANAGERIAL INSIGHTS FROM THE ROPI MODEL (pg. 1.14-14) | |
| ASSESSMENT OF VALUATION MODELS (pg. 1.14-16) | |
| ANALYZING GLOBAL REPORTS (pg. 1.14-17) | |
| REVIEW 14-4 (pg. 1.14-17) | |
| APPENDIX 14A: P&G FINANCIAL STATEMENTS (pg. 1.14-18) | |
| GUIDANCE ANSWERS (pg. 1.14-21) | |
| QUESTIONS (pg. 1.14-21) | |
| MINI EXERCISES (pg. 1.14-21) | |
| EXERCISES (pg. 1.14-23) | |
| PROBLEMS (pg. 1.14-27) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.14-31) | |
| ONGOING ANALYSIS PROJECT (pg. 1.14-32) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.14-33) | |
| MODULE 15: Market-Based Valuation (pg. 1.15-1) | |
| Dollar General (pg. 1.15-2) | |
| Valuation Model using Market Multiples (pg. 1.15-3) | |
| Application of the Model Using Market Multiples (pg. 1.15-4) | |
| VALUATION USING BALANCE SHEET MULTIPLES (pg. 1.15-5) | |
| Valuation Using a Net Operating Asset (NOA) Multiple (pg. 1.15-6) | |
| Valuation Using a Book Value (BV) Multiple (pg. 1.15-7) | |
| REVIEW 15-1 (pg. 1.15-8) | |
| VALUATION USING INCOME STATEMENT MULTIPLES (pg. 1.15-8) | |
| Valuation Using a Net Operating Profit After Tax (NOPAT) Multiple (pg. 1.15-9) | |
| Valuation Using a Net Income (NI) Multiple (pg. 1.15-10) | |
| Valuation Using Industry-Based Multiples (pg. 1.15-11) | |
| Combining Estimates from Differing Multiples (pg. 1.15-12) | |
| REVIEW 15-2 (pg. 1.15-12) | |
| SELECTING COMPARABLES FOR MARKET MULTIPLES (pg. 1.15-12) | |
| Deriving Price-to-Book from Residual Operating Income Model (pg. 1.15-13) | |
| PB Ratios in Relation to Profitability, Growth, and Risk (pg. 1.15-14) | |
| Deriving Price-to-Earnings from Residual Operating Income Model (pg. 1.15-17) | |
| PE Ratios in Relation to Profitability, Growth, and Risk (pg. 1.15-18) | |
| REVIEW 15-3 (pg. 1.15-19) | |
| INTERPRETING AND REVERSE ENGINEERING MARKET MULTIPLES (pg. 1.15-19) | |
| Interpreting and Reverse Engineering the PB Ratio (pg. 1.15-19) | |
| Interpreting and Reverse Engineering the PE Ratio (pg. 1.15-21) | |
| Perspective on Valuation Multiples and Fundamental Analysis (pg. 1.15-22) | |
| REVIEW 15-4 (pg. 1.15-23) | |
| GUIDANCE ANSWERS (pg. 1.15-23) | |
| QUESTIONS (pg. 1.15-24) | |
| MINI EXERCISES (pg. 1.15-24) | |
| EXERCISES (pg. 1.15-26) | |
| PROBLEMS (pg. 1.15-30) | |
| ANALYSIS DISCUSSION POINTS (pg. 1.15-34) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.15-38) | |
| APPENDIX A: Compound Interest Tables (pg. 1.A-1) | |
| APPENDIX B: Computing and Analyzing Cash Flows (pg. 1.B-1) | |
| Starbucks (pg. 1.B-2) | |
| FRAMEWORK FOR STATEMENT OF CASH FLOWS (pg. 1.B-3) | |
| Relation Among Financial Statements (pg. 1.B-3) | |
| Statement of Cash Flows Structure (pg. 1.B-4) | |
| Operating Activities Preview (pg. 1.B-7) | |
| Investing Activities Preview (pg. 1.B-8) | |
| Financing Activities Preview (pg. 1.B-9) | |
| REVIEW B-1 (pg. 1.B-9) | |
| CASH FLOW FROM OPERATING ACTIVITIES (pg. 1.B-9) | |
| Steps to Compute Net Cash Flow from Operating Activities (pg. 1.B-10) | |
| Java House Case Illustration (pg. 1.B-12) | |
| REVIEW B-2 (pg. 1.B-16) | |
| COMPUTING CASH FLOWS FROM INVESTING ACTIVITIES (pg. 1.B-17) | |
| Analyze Remaining Noncash Assets (pg. 1.B-17) | |
| Java House Case Illustration (pg. 1.B-17) | |
| REVIEW B-3 (pg. 1.B-18) | |
| CASH FLOWS FROM FINANCING ACTIVITIES (pg. 1.B-18) | |
| Analyze Remaining Liabilities and Equity (pg. 1.B-18) | |
| Java House Case Illustration (pg. 1.B-18) | |
| REVIEW B-4A (pg. 1.B-19) | |
| Computing Cash Flows from Balance Sheet Accounts (pg. 1.B-19) | |
| Supplemental Disclosures for the Indirect Method (pg. 1.B-20) | |
| REVIEW B-4B (pg. 1.B-21) | |
| ANALYSIS OF CASH FLOW INFORMATION (pg. 1.B-21) | |
| Cash Flow Components (pg. 1.B-21) | |
| Cash Flow Patterns (pg. 1.B-23) | |
| Usefulness of the Statement of Cash Flows (pg. 1.B-26) | |
| REVIEW B-5 (pg. 1.B-27) | |
| Ratio Analyses of Cash Flows (pg. 1.B-28) | |
| Free Cash Flow (pg. 1.B-29) | |
| REVIEW B-6 (pg. 1.B-30) | |
| APPENDIX B1: DIRECT METHOD REPORTING FOR THE STATEMENT OF CASH FLOWS (pg. 1.B-30) | |
| Cash Flows from Operating Activities (pg. 1.B-30) | |
| Cash Flows from Investing and Financing (pg. 1.B-33) | |
| REVIEW B-7 (pg. 1.B-33) | |
| GUIDANCE ANSWERS (pg. 1.B-33) | |
| QUESTIONS (pg. 1.B-34) | |
| MINI EXERCISES (pg. 1.B-35) | |
| EXERCISES (pg. 1.B-38) | |
| PROBLEMS (pg. 1.B-43) | |
| IFRS APPLICATIONS (pg. 1.B-55) | |
| SOLUTIONS TO REVIEW PROBLEMS (pg. 1.B-56) | |
| APPENDIX C: Comprehensive Case (pg. 1.C-1) | |
| Harley-Davidson (pg. 1.C-2) | |
| REVIEWING FINANCIAL STATEMENTS (pg. 1.C-3) | |
| Business Environment for Financial Reporting (pg. 1.C-3) | |
| Income Statement Reporting and Analysis (pg. 1.C-4) | |
| Balance Sheet Reporting and Analysis (pg. 1.C-9) | |
| Statement of Cash Flows Reporting and Analysis (pg. 1.C-22) | |
| Independent Audit Opinion (pg. 1.C-23) | |
| ASSESSING PROFITABILITY AND CREDITWORTHINESS (pg. 1.C-24) | |
| ROE Disaggregation—DuPont Analysis (pg. 1.C-24) | |
| ROE Disaggregation—Operating Focus (pg. 1.C-25) | |
| Disaggregation of RNOA—Margin and Turnover (pg. 1.C-26) | |
| Credit Analysis (pg. 1.C-26) | |
| Summarizing Profitability and Creditworthiness (pg. 1.C-27) | |
| FORECASTING FINANCIAL STATEMENTS (pg. 1.C-28) | |
| VALUING EQUITY SECURITIES (pg. 1.C-31) | |
| Discounted Cash Flow Valuation (pg. 1.C-32) | |
| Residual Operating Income Valuation (pg. 1.C-32) | |
| Assessment of the Valuation Estimate (pg. 1.C-32) | |
| Summary Observations (pg. 1.C-32) | |
| APPENDIX D: Chart of Accounts (with Acronyms) (pg. 1.D-1) | |
| Glossary (pg. 1.G-1) | |
| Index (pg. 1.I-1) | |
| Financial Statement Analysis & Valuation, 5e (Easton, McAnally, Sommers, Zhang) | |
|---|---|
|
Appendix C Harley-Davidson Case Last Updated: Nov 27 2018 |
This is the Harley-Davidson Case at the end of the book (Appendix C). |
|
Errata - Textbook Last Updated: Nov 27 2018 |
Corrections to the text that were identified after the first printing. |
|
Excel templates Last Updated: Nov 27 2018 |
Excel templates for Module Reviews. |
|
Practice Quizzes Last Updated: Nov 27 2018 |
Brief practice quizzes containing multiple choice questions for each module. |
|
Practice Quiz Solutions Last Updated: Nov 27 2018 |
Solutions to brief practice quizzes. |
