Test Book, 1e
by Wild
ISBN: 0000000000 | Copyright 2025
Tabspromote
| Expand/Collapse All | |
|---|---|
| About the Authors (pg. iii) | |
| Preface (pg. v) | |
| Brief Contents (pg. xv) | |
| Contents (pg. xvi) | |
| Module 1: Framework for Analysis and Valuation (pg. 1-1) | |
| Step 1 Business Environment and Accounting (pg. 1-5) | |
| Review 1-1 (pg. 1-6) | |
| Financial Statements: Demand and Supply (pg. 1-6) | |
| Demand for Information (pg. 1-6) | |
| Supply of Information (pg. 1-9) | |
| International Accounting Standards (pg. 1-11) | |
| Review of Financial Statements (pg. 1-12) | |
| Balance Sheet (pg. 1-12) | |
| Income Statement (pg. 1-15) | |
| Statement of Stockholders’ Equity (pg. 1-17) | |
| Statement of Cash Flows (pg. 1-18) | |
| Information Beyond Financial Statements (pg. 1-19) | |
| Review 1-3 (pg. 1-19) | |
| Analyzing the Business Environment (pg. 1-20) | |
| Analyzing the Value-Chain (pg. 1-20) | |
| Five-Forces Analysis of Business Environment (pg. 1-20) | |
| SWOT Analysis of Business Environment (pg. 1-22) | |
| Analyzing Competitive Advantage (pg. 1-23) | |
| Review 1-4 (pg. 1-25) | |
| Step 2 Adjusting and Analyzing Financial Data (pg. 1-25) | |
| Managerial Choices in Financial Reporting (pg. 1-25) | |
| Analysis of Return on Assets (pg. 1-27) | |
| Components of Return on Assets (pg. 1-27) | |
| Analysis of Return on Equity (pg. 1-28) | |
| Review 1-5 (pg. 1-29) | |
| Step 3 Forecasting Financial Numbers (pg. 1-29) | |
| Review 1-6 (pg. 1-30) | |
| Step 4 Business Valuation (pg. 1-30) | |
| Valuation Models (pg. 1-31) | |
| Are Financial Data Relevant? (pg. 1-31) | |
| Financial Statement Analysis in an Efficient Capital Market (pg. 1-32) | |
| Analyzing Global Reports (pg. 1-33) | |
| Review 1-7 (pg. 1-33) | |
| Appendix 1A: Financial Statement Data and Analytics (pg. 1-34) | |
| SEC Filings (pg. 1-34) | |
| Data Analytics (pg. 1-36) | |
| Guidance Answer (pg. 1-37) | |
| Questions (pg. 1-39) | |
| Mini Exercises (pg. 1-40) | |
| Exercises (pg. 1-42) | |
| Problems (pg. 1-44) | |
| Analysis Decision Points (pg. 1-49) | |
| Ongoing Analysis Project (pg. 1-49) | |
| Solutions to Reviews (pg. 1-50) | |
| Module 2: Review of Business Activities and Financial Statements (pg. 2-1) | |
| Interpreting a Balance Sheet (pg. 2-3) | |
| Assets (pg. 2-3) | |
| Liabilities and Equity (pg. 2-5) | |
| Analyst Adjustments 2.1 (pg. 2-10) | |
| Review 2-1 (pg. 2-12) | |
| Interpreting an Income Statement (pg. 2-13) | |
| Recognizing Revenues and Expenses (pg. 2-14) | |
| Reporting Discontinued Operations (pg. 2-15) | |
| Analyst Adjustments 2.2 (pg. 2-16) | |
| Analyzing the Income Statement (pg. 2-16) | |
| Analyst Adjustments 2.3 (pg. 2-17) | |
| Review 2-2 (pg. 2-17) | |
| Interpreting a Statement of Stockholders’ Equity (pg. 2-18) | |
| Review 2-3 (pg. 2-18) | |
| Interpreting a Statement of Cash Flows (pg. 2-19) | |
| Statement Format and Data Sources (pg. 2-19) | |
| Review 2-4 (pg. 2-20) | |
| Articulation of Financial Statements (pg. 2-20) | |
| Retained Earnings Reconciliation (pg. 2-20) | |
| Financial Statement Linkages (pg. 2-21) | |
| Review 2-5 (pg. 2-22) | |
| Analyzing Transactions and Adjustments (pg. 2-22) | |
| Four-Step Accounting Cycle (pg. 2-23) | |
| Financial Statement Effects Template (pg. 2-23) | |
| Step 1-Analyze Transactions and Prepare Entries (pg. 2-24) | |
| Step 2-Prepare Accounting Adjustments (pg. 2-27) | |
| Step 3-Prepare Financial Statements (pg. 2-31) | |
| Step 4-Close the Books (pg. 2-32) | |
| Additional Information Sources (pg. 2-33) | |
| Form 10-K (pg. 2-33) | |
| Form 20-F and Form 40-F (pg. 2-34) | |
| Form 8-K (pg. 2-35) | |
| Analyst Reports (pg. 2-35) | |
| Credit Services (pg. 2-35) | |
| Data Services (pg. 2-36) | |
| Review 2-10 (pg. 2-36) | |
| Analyzing Global Reports (pg. 2-36) | |
| Guidance Answers (pg. 2-37) | |
| Multiple Choice (pg. 2-37) | |
| Questions (pg. 2-38) | |
| Mini Exercises (pg. 2-39) | |
| Exercises (pg. 2-41) | |
| Problems (pg. 2-47) | |
| Analysis Discussion Points (pg. 2-51) | |
| Data Analytics (pg. 2-51) | |
| Ongoing Analysis Project (pg. 2-51) | |
| Solutions to Reviews (pg. 2-52) | |
| Module 3: Profitability Analysis and Interpretation (pg. 3-1) | |
| Return on Equity (ROE) (pg. 3-3) | |
| Review 3-1 (pg. 3-5) | |
| ROE Disaggregation: DuPont Analysis (pg. 3-5) | |
| Return on Assets (ROA) (pg. 3-5) | |
| Financial Leverage (FL) (pg. 3-6) | |
| Noncontrolling Interest Ratio (NCIR) (pg. 3-6) | |
| Review 3-2 (pg. 3-7) | |
| Return on Assets and Its Disaggregation (pg. 3-8) | |
| Analyst Adjustments 3.1 (pg. 3-8) | |
| Analysis of Profitability and Productivity (pg. 3-9) | |
| Analysis of Profitability (pg. 3-10) | |
| Analysis of Productivity (pg. 3-11) | |
| Analysis of Financial Leverage (pg. 3-15) | |
| Analyst Adjustments 3.2 (pg. 3-16) | |
| Review 3-3 (pg. 3-17) | |
| Balance Sheet Analysis with an Operating Focus (pg. 3-17) | |
| Return on Net Operating Assets (RNOA) (pg. 3-18) | |
| Net Operating Assets (NOA) (pg. 3-18) | |
| Net Nonoperating Obligations (NNO) (pg. 3-20) | |
| Review 3-4 (pg. 3-23) | |
| Income Statement Analysis with an Operating Focus (pg. 3-23) | |
| Operating Line Items on the Income Statement (pg. 3-24) | |
| Nonoperating Line Items on the Income Statement (pg. 3-24) | |
| Net Nonoperating Expense (NNE) (pg. 3-26) | |
| Review 3-5 (pg. 3-27) | |
| Return on Net Operating Assets (RNOA) (pg. 3-27) | |
| Review 3-6 (pg. 3-29) | |
| RNOA Disaggregation into Margin and Turnover (pg. 3-30) | |
| Net Operating Profit Margin (pg. 3-30) | |
| Net Operating Asset Turnover (pg. 3-30) | |
| Trade-Off between Margin and Turnover (pg. 3-31) | |
| Analyst Adjustments 3.4 (pg. 3-32) | |
| Review 3-7 (pg. 3-33) | |
| Analyzing Global Reports (pg. 3-34) | |
| Appendix 3A: Operating versus Nonoperating Classification (pg. 3-34) | |
| Appendix 3B: Nonoperating Return Component of ROE (pg. 3-35) | |
| Nonoperating Return-With Net Nonoperating Assets (pg. 3-37) | |
| Review 3-8 (pg. 3-39) | |
| Appendix 3C: Vertical and Horizontal Analysis (pg. 3-39) | |
| Limitations of Ratio Analysis (pg. 3-41) | |
| Review 3-9 (pg. 3-42) | |
| Guidance Answer (pg. 3-42) | |
| Multiple Choice (pg. 3-42) | |
| Questions (pg. 3-44) | |
| Mini Exercises (pg. 3-45) | |
| Exercises (pg. 3-47) | |
| Problems (pg. 3-53) | |
| Analysis Discussion Points (pg. 3-61) | |
| Data Analytics (pg. 3-61) | |
| Ongoing Analysis Project (pg. 3-61) | |
| Solutions to Reviews (pg. 3-62) | |
| Module 4 Credit Risk Analysis and Interpretation (pg. 4-1) | |
| Market for Credit (pg. 4-3) | |
| Demand for Credit (pg. 4-3) | |
| Supply of Credit (pg. 4-4) | |
| Review 4-1 (pg. 4-6) | |
| Credit Risk Analysis Process (pg. 4-6) | |
| Information for Credit Risk Analysis (pg. 4-6) | |
| Chance of Default (pg. 4-7) | |
| Loss Given Default (pg. 4-8) | |
| Review 4-2 (pg. 4-11) | |
| Measuring Credit Risk (pg. 4-11) | |
| Adjusting Financial Information (pg. 4-11) | |
| Analyst Adjustments 4.1 (pg. 4-12) | |
| Overarching Approach to Credit Analysis (pg. 4-12) | |
| Capital Structure (Solvency) Analysis (pg. 4-13) | |
| Coverage Analysis (pg. 4-15) | |
| Liquidity Analysis (pg. 4-19) | |
| Review 4-3 (pg. 4-20) | |
| Credit Ratings (pg. 4-22) | |
| Importance of Credit Ratings (pg. 4-23) | |
| How Credit Ratings Are Determined (pg. 4-24) | |
| Review 4-4 (pg. 4-33) | |
| Predicting Bankruptcy Risk (pg. 4-33) | |
| Review 4-5 lo4-5 (pg. 4-34) | |
| Appendix 4A: Verizon Financial Statements and Debt and Lease Notes (pg. 4-35) | |
| Appendix 4B: Approaches of Other Credit Raters (pg. 4-39) | |
| Moody’s Investors Service (pg. 4-39) | |
| Fitch Ratings (pg. 4-40) | |
| Guidance Answers (pg. 4-40) | |
| Multiple Choice (pg. 4-41) | |
| Questions (pg. 4-42) | |
| Mini Exercises (pg. 4-42) | |
| Exercises (pg. 4-44) | |
| Problems (pg. 4-49) | |
| Analysis Discussion Point (pg. 4-56) | |
| Data Analytics (pg. 4-56) | |
| Ongoing Analysis Project (pg. 4-56) | |
| Solutions to Reviews (pg. 4-56) | |
| Module 5: Revenue Recognition and Operating Income (pg. 5-1) | |
| Analyzing Revenue (pg. 5-3) | |
| Revenue Recognition Rules (pg. 5-4) | |
| Complications of Revenue Recognition (pg. 5-5) | |
| Performance Obligations Satisfied Over Time (pg. 5-6) | |
| Performance Obligations Satisfied Over Time (pg. 5-6) | |
| Review 5-1 lo5-1 (pg. 5-8) | |
| Analyzing Sales Allowances (pg. 5-9) | |
| Accounting for Sales Allowances (pg. 5-9) | |
| Reporting Sales Allowances (pg. 5-10) | |
| Analysis of Sales Allowances (pg. 5-10) | |
| Analyst Adjustments 5.1 (pg. 5-11) | |
| Review 5-2 lo5-2 (pg. 5-12) | |
| Analyzing Unearned (Deferred) Revenue (pg. 5-13) | |
| Review 5-3 lo5-3 (pg. 5-15) | |
| Foreign Currency Effects on Revenue, Expenses, and Cash Flow (pg. 5-15) | |
| Foreign Currency and Cash Flows (pg. 5-16) | |
| Foreign Currency and Income (pg. 5-16) | |
| Foreign Currency and Future Results (pg. 5-17) | |
| Review 5-4 lo5-4 (pg. 5-17) | |
| Analyzing Accounts Receivable (pg. 5-18) | |
| Aging Analysis of Receivables (pg. 5-18) | |
| Accounting for Accounts Receivable (pg. 5-19) | |
| Analysis of Accounts Receivable-Magnitude (pg. 5-20) | |
| Analysis of Accounts Receivable-Quality (pg. 5-22) | |
| Analyst Adjustments 5.2 (pg. 5-23) | |
| Review 5-5 lo5-5 (pg. 5-24) | |
| Analyzing Expenses and Losses (pg. 5-25) | |
| Analyze Deductions from Income (pg. 5-25) | |
| Analyze Research and Development Expense (pg. 5-26) | |
| Provision (Benefit) for Taxes on Income (pg. 5-30) | |
| Analyze Discontinued Operations (pg. 5-31) | |
| Analyst Adjustments 5.3 (pg. 5-33) | |
| Review 5-6 lo5-6 (pg. 5-33) | |
| Pro Forma and Non-GAAP Disclosures (pg. 5-34) | |
| Regulation G Reconciliation (pg. 5-34) | |
| SEC Warnings about Pro Forma Numbers (pg. 5-35) | |
| Disclosures and Market Assessments (pg. 5-36) | |
| Review 5-7 (pg. 5-37) | |
| Analyzing Global Reports (pg. 5-38) | |
| Guidance Answer (pg. 5-39) | |
| Multiple Choice (pg. 5-39) | |
| Questions (pg. 5-40) | |
| Mini Exercises (pg. 5-40) | |
| Exercises (pg. 5-45) | |
| Problems (pg. 5-53) | |
| Analysis Discussion Points (pg. 5-61) | |
| Data Analytics (pg. 5-61) | |
| Ongoing Analysis Project (pg. 5-61) | |
| Solutions to Reviews (pg. 5-61) | |
| Module 6: Asset Recognition and Operating Assets (pg. 6-1) | |
| Analyzing Inventory-Costing Methods (pg. 6-3) | |
| First-In, First-Out (FIFO) (pg. 6-4) | |
| Last-In, First-Out (LIFO) (pg. 6-5) | |
| Average Cost (AC) (pg. 6-5) | |
| Financial Statement Effects of Inventory Costing (pg. 6-7) | |
| Analyzing Inventory-Reporting (pg. 6-9) | |
| Lower of Cost or Market (LCM) (pg. 6-9) | |
| LIFO Reserve Adjustments to Financial Statements (pg. 6-10) | |
| LIFO Liquidations (pg. 6-11) | |
| Analyst Adjustments 6.1 (pg. 6-12) | |
| Review 6-2 (pg. 6-13) | |
| Analyzing Inventory-Tools (pg. 6-13) | |
| Gross Profit Analysis (pg. 6-13) | |
| Days Inventory Outstanding and Inventory Turnover (pg. 6-15) | |
| Days Payable Outstanding (pg. 6-17) | |
| Cash Conversion Cycle (pg. 6-18) | |
| Review 6-3 (pg. 6-19) | |
| Analyzing PP&E Assets-Capitalization and Depreciation (pg. 6-20) | |
| Plant and Equipment (pg. 6-20) | |
| Research and Development Facilities and Equipment (pg. 6-22) | |
| Review 6-4 (pg. 6-22) | |
| Analyzing PP&E Assets-Sales, Impairments, and Restructuring (pg. 6-23) | |
| Asset Sales (pg. 6-23) | |
| Analyst Adjustments 6.2 (pg. 6-23) | |
| Asset Impairments (pg. 6-24) | |
| Restructuring Costs (pg. 6-25) | |
| Analyst Adjustments 6.3 (pg. 6-28) | |
| Review 6-5 (pg. 6-29) | |
| Analyzing PP&E Assets-Tools (pg. 6-30) | |
| PP&E Turnover (pg. 6-30) | |
| Analyst Adjustments 6.4 (pg. 6-31) | |
| PP&E Useful Life (pg. 6-32) | |
| PP&E Percent Used Up (pg. 6-32) | |
| Review 6-6 (pg. 6-33) | |
| Analyzing Intangible Assets (pg. 6-33) | |
| Types and Valuation of Intangible Assets (pg. 6-35) | |
| Valuation Models for Intangible Assets (pg. 6-37) | |
| Accounting for Goodwill (pg. 6-37) | |
| Analysis of Intangible Asset Impairment Charges (pg. 6-38) | |
| Analyst Adjustments 6.5 (pg. 6-39) | |
| Review 6-7 (pg. 6-40) | |
| Analyzing Global Reports (pg. 6-41) | |
| Guidance Answers (pg. 6-42) | |
| Multiple Choice (pg. 6-43) | |
| Questions (pg. 6-45) | |
| Mini Exercises (pg. 6-46) | |
| Exercises (pg. 6-49) | |
| Problems (pg. 6-55) | |
| Analysis Discussion Points (pg. 6-61) | |
| Data Analytics (pg. 6-61) | |
| Ongoing Analysis Project (pg. 6-61) | |
| Solutions to Reviews (pg. 6-61) | |
| Module 7: Liability Recognition and Nonowner Financing (pg. 7-1) | |
| Analyzing Accrued Liabilities (pg. 7-3) | |
| Accrued Liabilities Defined (pg. 7-3) | |
| Accruals for Contingent Liabilities Defined (pg. 7-5) | |
| Analyst Adjustments 7.1 (pg. 7-7) | |
| Review 7-1 (pg. 7-8) | |
| Analyzing Short-Term Debt (pg. 7-8) | |
| Reporting for Short-Term Debt (pg. 7-9) | |
| Current Maturities of Long-Term Debt (pg. 7-9) | |
| Analyzing Long-Term Debt-Pricing (pg. 7-10) | |
| Pricing of Bonds Issued at Par (pg. 7-11) | |
| Pricing of Bonds Issued at a Discount (pg. 7-12) | |
| Pricing of Bonds Issued at a Premium (pg. 7-12) | |
| Effective Cost of Debt (pg. 7-13) | |
| Review 7-3 (pg. 7-15) | |
| Analyzing Long-Term Debt-Reporting (pg. 7-15) | |
| Balance Sheet Reporting (pg. 7-15) | |
| Income Statement Reporting (pg. 7-17) | |
| Financial Statement Effects of Bond Repurchase (pg. 7-18) | |
| Fair Value Disclosures (pg. 7-19) | |
| Review 7-4 (pg. 7-20) | |
| Analyzing Global Reports (pg. 7-20) | |
| Appendix 7A: Time Value of Money (pg. 7-21) | |
| Present Value Concepts (pg. 7-21) | |
| Future Value Concepts (pg. 7-25) | |
| Appendix 7B: Amortization of Debt (pg. 7-26) | |
| Amortization of Discount (pg. 7-26) | |
| Amortization of Premium (pg. 7-27) | |
| Multiple Choice (pg. 7-28) | |
| Questions (pg. 7-29) | |
| Mini Exercises (pg. 7-29) | |
| Exercises (pg. 7-32) | |
| Problems (pg. 7-36) | |
| Analysis Discussion Points (pg. 7-39) | |
| Data Analytics (pg. 7-39) | |
| Ongoing Analysis Project (pg. 7-40) | |
| Solutions to Reviews (pg. 7-40) | |
| Module 8: Equity Recognition and Owner Financing (pg. 8-1) | |
| Analyzing Stockholders’ Equity and Classes of Stock (pg. 8-3) | |
| Stockholders’ Equity Accounts (pg. 8-3) | |
| Statement of Stockholders’ Equity (pg. 8-6) | |
| Preferred Stock (pg. 8-7) | |
| Common Stock (pg. 8-8) | |
| Analyst Adjustments 8.1 (pg. 8-9) | |
| Review 8-1 (pg. 8-10) | |
| Analyzing Stock Transactions (pg. 8-10) | |
| Stock Issuance (pg. 8-10) | |
| Stock Repurchase (pg. 8-11) | |
| Review 8-2 (pg. 8-15) | |
| Analyzing Stock-Based Compensation (pg. 8-16) | |
| Characteristics of Stock-Based Compensation Plans (pg. 8-16) | |
| Analysis of Stock-Based Compensation Plans (pg. 8-16) | |
| Accounting for Stock-Based Compensation (pg. 8-17) | |
| Note Disclosures for Stock-Based Compensation (pg. 8-18) | |
| Review 8-3 (pg. 8-19) | |
| Analyzing Dividends and Stock Splits (pg. 8-19) | |
| Cash Dividend Disclosures (pg. 8-20) | |
| Dividend Payout and Yield (pg. 8-20) | |
| Cash Dividends Financial Effects (pg. 8-20) | |
| Stock Split (pg. 8-21) | |
| Review 8-4 (pg. 8-21) | |
| Analyzing Accumulated Other Comprehensive Income (AOCI) (pg. 8-22) | |
| AOCI Components (pg. 8-22) | |
| AOCI Disclosures and Interpretation (pg. 8-22) | |
| Analyst Adjustments 8.3 (pg. 8-25) | |
| Review 8-5 (pg. 8-26) | |
| Analyzing Earnings per Share (EPS) (pg. 8-26) | |
| Review 8-6 (pg. 8-28) | |
| Analyzing Global Reports (pg. 8-28) | |
| Appendix 8A: Stock-Based Compensation: Reporting and Analyzing (pg. 8-29) | |
| Employee Stock Purchase Plans (ESPP) (pg. 8-29) | |
| Stock Awards (pg. 8-29) | |
| Stock Options (pg. 8-29) | |
| Stock Appreciation Rights (SAR) (pg. 8-30) | |
| Summary of Share-Based Compensation (pg. 8-30) | |
| Analysis Implications (pg. 8-30) | |
| Guidance Answer (pg. 8-31) | |
| Multiple Choice (pg. 8-31) | |
| Questions (pg. 8-33) | |
| Mini Exercises (pg. 8-33) | |
| Exercises (pg. 8-37) | |
| Problems (pg. 8-41) | |
| Data Analytics (pg. 8-46) | |
| Ongoing Analysis Project (pg. 8-46) | |
| Solutions to Reviews (pg. 8-46) | |
| Module 9: Intercorporate Investments (pg. 9-1) | |
| Analyzing Intercorporate Investments (pg. 9-3) | |
| Passive Investments in Equity Securities (pg. 9-4) | |
| Investments in Debt Securities (pg. 9-8) | |
| Review 9-1 (pg. 9-11) | |
| Analyzing Equity Investments with Significant Influence (pg. 9-12) | |
| Investments with Significant Influence (pg. 9-12) | |
| Equity Method Accounting and ROE Effects (pg. 9-14) | |
| Review 9-2 (pg. 9-17) | |
| Analyzing Equity Investments with Control (pg. 9-17) | |
| Investments with Control (pg. 9-18) | |
| Analyst Adjustments 9.1 (pg. 9-26) | |
| Review 9-3 (pg. 9-27) | |
| Analyzing Global Reports (pg. 9-28) | |
| Appendix 9A: Analyzing Derivatives (pg. 9-29) | |
| Analysis of Derivatives (pg. 9-30) | |
| Review 9-4 (pg. 9-31) | |
| Appendix 9B: Analyzing Equity Carve-Outs (pg. 9-32) | |
| Analysis of Equity Carve-Outs (pg. 9-35) | |
| Review 9-5 (pg. 9-36) | |
| Guidance Answer (pg. 9-36) | |
| Multiple Choice (pg. 9-37) | |
| Questions (pg. 9-37) | |
| Mini Exercises (pg. 9-38) | |
| Exercises (pg. 9-41) | |
| Problems (pg. 9-46) | |
| Analysis Discussion Point (pg. 9-49) | |
| Data Analytics (pg. 9-49) | |
| Ongoing Analysis Project (pg. 9-49) | |
| Solutions to Reviews (pg. 9-50) | |
| Module 10: Analyzing Leases, Pensions, and Taxes (pg. 10-1) | |
| Analyzing Leases (pg. 10-3) | |
| Lessee Reporting Example-Microsoft (pg. 10-3) | |
| Lease Accounting (pg. 10-5) | |
| Summary of Lease Accounting and Reporting (pg. 10-8) | |
| Analyst Adjustments 10.1 (pg. 10-9) | |
| Review 10-1 (pg. 10-9) | |
| Analyzing Pensions (pg. 10-10) | |
| Defined Benefit Plans on the Balance Sheet (pg. 10-11) | |
| Analysis Issue-Sufficiency of Plan Assets (pg. 10-12) | |
| Fair Value Accounting for Pensions (pg. 10-18) | |
| Note Disclosure-Key Assumptions (pg. 10-20) | |
| Analysis Implications (pg. 10-20) | |
| Analyst Adjustments 10.2 (pg. 10-21) | |
| Other Post-Employment Benefits (OPEB) (pg. 10-23) | |
| Review 10-2 (pg. 10-24) | |
| Analyzing Income Taxes (pg. 10-25) | |
| Timing Differences Create Deferred Tax Assets and Deferred Tax Liabilities (pg. 10-25) | |
| Disclosures for Income Taxes (pg. 10-30) | |
| Analysis of Income Tax Disclosures (pg. 10-31) | |
| Expanded Explanation of Deferred Taxes (pg. 10-32) | |
| Analyst Adjustments 10.3 (pg. 10-35) | |
| Review 10-3 (pg. 10-35) | |
| Analyzing Global Reports (pg. 10-37) | |
| Appendix 10A: Lease Accounting Example- Finance and Operating Leases (pg. 10-37) | |
| Multiple Choice (pg. 10-38) | |
| Questions (pg. 10-40) | |
| Mini Exercises (pg. 10-40) | |
| Exercises (pg. 10-46) | |
| Problems (pg. 10-49) | |
| Data Analytics (pg. 10-56) | |
| Ongoing Analysis Project (pg. 10-56) | |
| Solutions to Reviews (pg. 10-56) | |
| Module 11: Financial Statement Forecasting (pg. 11-1) | |
| Forecasting Process (pg. 11-4) | |
| Company Guidance (pg. 11-6) | |
| Review 11-1 (pg. 11-7) | |
| Forecasting the Income Statement (pg. 11-8) | |
| Review 11-2 (pg. 11-13) | |
| Forecasting the Balance Sheet (pg. 11-14) | |
| Review 11-3 (pg. 11-18) | |
| Building Forecasts from Segment Disclosures (pg. 11-19) | |
| Segment Data (pg. 11-19) | |
| Quarterly Data (pg. 11-24) | |
| Review 11-4 (pg. 11-24) | |
| Appendix 11A: Forecasting the Statement of Cash Flows (pg. 11-25) | |
| Review 11-5 (pg. 11-26) | |
| Appendix 11B: Multiyear Forecasting with Target Cash and Debt Financing (pg. 11-27) | |
| Income Statement (pg. 11-28) | |
| Balance Sheet (pg. 11-28) | |
| Forecasting Sensitivity Analysis (pg. 11-30) | |
| Review 11-6 (pg. 11-31) | |
| Appendix 11C: Parsimonious Method for Forecasting NOPAT and NOA (pg. 11-31) | |
| Review 11-7 (pg. 11-32) | |
| Appendix 11D: Morgan Stanley’s Forecast Report on Procter & Gamble (pg. 11-32) | |
| Multiple Choice (pg. 11-40) | |
| Questions (pg. 11-41) | |
| Mini Exercises (pg. 11-41) | |
| Exercises (pg. 11-47) | |
| Problems (pg. 11-54) | |
| Data Analytics (pg. 11-62) | |
| Ongoing Analysis Project (pg. 11-62) | |
| Solutions to Reviews (pg. 11-62) | |
| Module 12: Cost of Capital and Valuation Basics (pg. 12-1) | |
| Basics of Valuation (pg. 12-3) | |
| Payoffs from Equity and Debt Instruments (pg. 12-4) | |
| Steps in Stock Valuation (pg. 12-4) | |
| Intrinsic Value (pg. 12-5) | |
| Valuation of a Debt Instrument (pg. 12-6) | |
| Valuation of an Equity Instrument (pg. 12-6) | |
| Estimating Cost of Capital (pg. 12-7) | |
| Diversifiable and Non-Diversifiable Risk (pg. 12-8) | |
| Review 12-1 (pg. 12-8) | |
| Cost of Equity Capital Using CAPM (pg. 12-9) | |
| Cost of Equity Capital Using a Multi-Factor Model (pg. 12-10) | |
| Review 12-2 (pg. 12-11) | |
| Cost of Debt Capital (pg. 12-11) | |
| Review 12-3 (pg. 12-13) | |
| Weighted Average Cost of Capital (pg. 12-13) | |
| Review 12-4 (pg. 12-15) | |
| Dividend Discount Model (pg. 12-15) | |
| Recursive Process of Valuation (pg. 12-15) | |
| Framework of Dividend Discount Model (pg. 12-16) | |
| DDM with Constant Perpetuity (pg. 12-16) | |
| Review 12-5 (pg. 12-17) | |
| DDM with Increasing Perpetuity (pg. 12-17) | |
| Applying the Dividend Discount Model (pg. 12-18) | |
| Review 12-6 (pg. 12-20) | |
| Appendix 12A: Estimating Cost of Equity Capital (pg. 12-20) | |
| Guidance Answer (pg. 12-25) | |
| Multiple Choice (pg. 12-25) | |
| Questions (pg. 12-25) | |
| Mini Exercises (pg. 12-26) | |
| Exercises (pg. 12-27) | |
| Problems (pg. 12-28) | |
| Analysis Discussion Points (pg. 12-32) | |
| Data Analytics (pg. 12-32) | |
| Ongoing Analysis Project (pg. 12-32) | |
| Solutions to Reviews (pg. 12-32) | |
| Module 13: Cash-Flow-Based Valuation (pg. 13-1) | |
| Equity Valuation Models (pg. 13-3) | |
| Dividend Discount Model (pg. 13-3) | |
| Discounted Cash Flow Model (pg. 13-4) | |
| Residual Operating Income Model (pg. 13-4) | |
| Model Equivalency (pg. 13-4) | |
| Valuation Model Inputs (pg. 13-4) | |
| Review 13-1 (pg. 13-6) | |
| Discounted Cash Flow (DCF) Model (pg. 13-6) | |
| DCF Model Structure (pg. 13-6) | |
| Steps in Applying the DCF Model (pg. 13-8) | |
| Illustrating the DCF Model (pg. 13-8) | |
| Review 13-2 (pg. 13-10) | |
| Sensitivity Analysis of the Model (pg. 13-11) | |
| Reverse Engineering of the Model (pg. 13-13) | |
| REVIEW 13-3 (pg. 13-15) | |
| Analyzing Global Reports (pg. 13-15) | |
| Appendix 13A: P&G Financial Statements (pg. 13-16) | |
| Appendix 13B: Derivation of Free Cash Flow Formula (pg. 13-18) | |
| Appendix 13C: Deutsche Bank Valuation of P&G (pg. 13-18) | |
| Guidance Answer (pg. 13-30) | |
| Multiple Choice (pg. 13-30) | |
| Questions (pg. 13-31) | |
| Mini Exercises (pg. 13-31) | |
| Exercises (pg. 13-34) | |
| Problems (pg. 13-36) | |
| Analysis Discussion Point (pg. 13-40) | |
| Data Analytics (pg. 13-41) | |
| Ongoing Analysis Project (pg. 13-41) | |
| Solutions to Reviews (pg. 13-41) | |
| Module 14: Operating-Income-Based Valuation (pg. 14-1) | |
| Equity Valuation Models (pg. 14-3) | |
| Dividend Discount Model (pg. 14-3) | |
| Discounted Cash Flow Model (pg. 14-3) | |
| Residual Operating Income Model (pg. 14-4) | |
| Model Equivalency (pg. 14-4) | |
| Valuation Model Inputs (pg. 14-4) | |
| Review 14-1 (pg. 14-6) | |
| Residual Operating Income (ROPI) Model (pg. 14-6) | |
| ROPI Model Structure (pg. 14-6) | |
| Steps in Applying the ROPI Model (pg. 14-7) | |
| Illustrating the ROPI Model (pg. 14-8) | |
| Sensitivity Analysis of the Model (pg. 14-10) | |
| Reverse Engineering of the Model (pg. 14-10) | |
| Review 14-2 (pg. 14-11) | |
| Steady State in Valuation (pg. 14-12) | |
| Multi-Year Forecast Precision (pg. 14-12) | |
| Achieving Steady State (pg. 14-13) | |
| Forecasting Steady State-An Illustration (pg. 14-13) | |
| Review 14-3 (pg. 14-15) | |
| Managerial Insights from the ROPI Model (pg. 14-16) | |
| Management Focus on Improved Efficiency (pg. 14-16) | |
| Management Focus on Improved Profitability (pg. 14-17) | |
| Assessment of Valuation Models (pg. 14-17) | |
| Analyzing Global Reports (pg. 14-18) | |
| Review 14-4 (pg. 14-18) | |
| Appendix 14A: P&G Financial Statements (pg. 14-19) | |
| Guidance Answer (pg. 14-21) | |
| Multiple Choice (pg. 14-21) | |
| Questions (pg. 14-22) | |
| Mini Exercises (pg. 14-23) | |
| Exercises (pg. 14-24) | |
| Problems (pg. 14-28) | |
| Analysis Discussion Point (pg. 14-32) | |
| Data Analytics (pg. 14-32) | |
| Ongoing Analysis Project (pg. 14-32) | |
| Solutions to Reviews (pg. 14-33) | |
| Module 15: Market-Based Valuation (pg. 15-1) | |
| Valuation Model Using Market Multiples (pg. 15-3) | |
| Application of Market Multiples (pg. 15-4) | |
| Valuation Using Balance Sheet Multiples (pg. 15-5) | |
| Valuation Using a Net Operating Asset Multiple (pg. 15-5) | |
| Valuation Using a Book Value Multiple (pg. 15-6) | |
| Review 15-1 (pg. 15-8) | |
| Valuation Using Income Statement Multiples (pg. 15-8) | |
| Valuation Using a NOPAT Multiple (pg. 15-9) | |
| Valuation Using a Net Income Multiple (pg. 15-9) | |
| Valuation Using Industry-Based Multiples (pg. 15-10) | |
| Combining Estimates from Differing Multiples (pg. 15-11) | |
| Review 15-2 (pg. 15-11) | |
| Selecting Comparables for Market Multiples (pg. 15-12) | |
| Deriving Price-to-Book (pg. 15-12) | |
| PB Ratios Based on Profitability, Growth, and Risk (pg. 15-13) | |
| Deriving Price-to-Earnings (pg. 15-16) | |
| PE Ratios Based on Profitability, Growth, and Risk (pg. 15-16) | |
| Review 15-3 (pg. 15-17) | |
| Interpreting and Reverse Engineering Market Multiples (pg. 15-18) | |
| Reverse Engineering the PB Ratio (pg. 15-18) | |
| Valuation Multiples and Fundamental Analysis (pg. 15-19) | |
| Review 15-4 (pg. 15-20) | |
| Guidance Answer (pg. 15-21) | |
| Multiple Choice (pg. 15-21) | |
| Questions (pg. 15-21) | |
| Mini Exercises (pg. 15-22) | |
| Exercises (pg. 15-24) | |
| Problems (pg. 15-28) | |
| Analysis Discussion Points (pg. 15-31) | |
| Data Analytics (pg. 15-33) | |
| Ongoing Analysis Project (pg. 15-33) | |
| Solutions to Reviews (pg. 15-33) | |
| Appendix A: Compound Interest Tables (pg. A-1) | |
| Appendix B: Computing and Analyzing Cash Flows (pg. B-1) | |
| Framework for Statement of Cash Flows (pg. B-3) | |
| Relation Among Financial Statements (pg. B-3) | |
| Statement of Cash Flows Format (pg. B-4) | |
| Operating Activities (pg. B-6) | |
| Review B-1 (pg. B-8) | |
| Cash Flow from Operating Activities (pg. B-9) | |
| Computing Net Cash Flow from Operating Activities (pg. B-10) | |
| Java House Case Illustration (pg. B-11) | |
| Review B-2 (pg. B-13) | |
| Cash Flows from Investing Activities (pg. B-14) | |
| Analyze Remaining Noncash Assets (pg. B-14) | |
| Java House Case Illustration (pg. B-14) | |
| Review B-3 (pg. B-15) | |
| Cash Flows from Financing Activities (pg. B-16) | |
| Analyze Remaining Liabilities and Equity (pg. B-16) | |
| Java House Case Illustration (pg. B-16) | |
| Review B-4 (pg. B-17) | |
| Supplemental Disclosures for Indirect Method (pg. B-17) | |
| Review B-5 (pg. B-18) | |
| Interpreting and Analyzing CASH FLOWS (pg. B-19) | |
| Overarching Principles (pg. B-19) | |
| Cash Flows as a Percent of Revenues (pg. B-21) | |
| Quality of Earnings (pg. B-22) | |
| Cash Flow Patterns (pg. B-25) | |
| Review B-6 (pg. B-28) | |
| Ratio Analyses of Cash Flows (pg. B-28) | |
| Free Cash Flow (pg. B-29) | |
| Review B-7 (pg. B-30) | |
| Appendix BB: Direct Method Reporting for Statement of Cash Flows (pg. B-31) | |
| We next explain and illustrate the process of converting Java House’s rev (pg. B-32) | |
| Cash Flows from Investing and Financing Activities (pg. B-33) | |
| Supplemental Disclosures (pg. B-33) | |
| Review B-8 (pg. B-33) | |
| Guidance Answer (pg. B-34) | |
| Multiple Choice (pg. B-34) | |
| Questions (pg. B-35) | |
| Mini Exercises (pg. B-36) | |
| Exercises (pg. B-39) | |
| Problems (pg. B-43) | |
| Data Analytics (pg. B-50) | |
| Solutions to Reviews (pg. B-50) | |
| Appendix C: Comprehensive Case (pg. C-1) | |
| Appendix D: Data Analytics and Blockchain Technology (pg. D-1) | |
| Data Analytics (pg. D-2) | |
| Big Data (pg. D-2) | |
| Types of Data Analytics (pg. D-2) | |
| Data Analytics in the Accounting Profession (pg. D-3) | |
| Data Analytic Tools (pg. D-5) | |
| Data Visualization (pg. D-6) | |
| Blockchain Technology (pg. D-10) | |
| Appendix E: Chart of Accounts with Acronyms (pg. E-1) | |
John J. Wild
John J. Wild is a distinguished professor of accounting and business at the University of Wisconsin at Madison. He previously held appointments at Michigan State University and the University of Manchester in England.
He received his BBA, MS, and PhD from the University of Wisconsin. Professor Wild teaches courses in accounting and analysis at both the undergraduate and graduate levels. He has received the Mabel W. Chipman Excellence-in-Teaching Award, the departmental Excellence-in-Teaching Award, and the MBA Teaching Excellence Award (twice) from the EMBA graduation classes at the University of Wisconsin. He also received the Beta Alpha Psi and Salmonson Excellence-in-Teaching Award from Michigan State University. Professor Wild is a past KPMG Peat Marwick National Fellow and is a prior recipient of fellowships from the American Accounting Association and the Ernst & Young Foundation.
Professor Wild is an active member of the American Accounting Association and its sections. He has served on several committees of these organizations, including the Outstanding Accounting Educator Award, Wildman Award, National Program Advisory, Publications, and Research Committees. Professor Wild is author of several best-selling books. His research articles on financial accounting and analysis appear in The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Contemporary Accounting Research, Journal of Accounting, Auditing & Finance, Journal of Accounting and Public Policy, Journal of Business Finance and Accounting, Auditing: A Journal of Theory and Practice, and other accounting and business journals. He is past associate editor of Contemporary Accounting Research and has served on editorial boards of several respected journals, including The Accounting Review and the Journal of Accounting and Public Policy.
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