Financial Statement Analysis Workbook: Step-by-Step Exercises and Tests to Help You Master Financial Statement Analysis, Third Edition (Wiley Finance) - Softcover

Fridson, Martin S.

Softcover

ISBN 10: 0471409189 ISBN 13: 9780471409182

Verlag: Wiley, 2002

Inhaltsangabe

Whether you're evaluating a company's stock price, assessing itscredit quality, or determining valuations for a merger oracquisition, deciphering the messages embedded within a company'sfinancial statements is critical-especially after the recent demiseof so-called "solid" companies. This workbook will help you do thisand much more, by allowing you to hone your skills and test theknowledge you've gained from reading Financial Statement Analysis,Third Edition.

Question-and-answer sections within this workbook correspond toeach chapter of Financial Statement Analysis, Third Edition, so youcan use this guide in conjunction with the actual text.Alternatively, you can use the self-administered tests that arealso a part of this workbook to independently practice the skill ofreading and understanding financial statements. Either way, usingthe Financial Statement Analysis Workbook will help you expand yourskills in reading and analyzing financial statements-so you cansuccessfully put your hard-won knowledge to work in the real world.

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Über die Autorin bzw. den Autor

MARTIN FRIDSON is Managing Director at Merrill Lynch & Companyand a member of Institutional Investor s All-America Fixed IncomeResearch Team. His other books include How to Be a Billionaire, ItWas a Very Good Year, and Investment Illusions, all published byWiley. He is a past governor of the Association for InvestmentManagement and Research.

FERNANDO ALVAREZ is Clinical Associate Professor in the BerkleyCenter for Entrepreneurial Studies at the Stern School of Businessat NYU. His current research focuses on the management of cashflows resulting from changes in working capital requirements, thestructure of cash flows, and the sources and uses of capital forthe entrepreneurial firm. His research has been funded by theMacArthur Foundation, the Kaufman Foundation, U.S. Trust of Boston,and Wells Fargo Bank.

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Whether you re evaluating a company s stock price, assessing its credit quality, or determining valuations for a merger or acquisition, deciphering the messages embedded within a company s financial statements is critical especially after the recent demise of so-called "solid" companies. This workbook will help you do this and much more, by allowing you to hone your skills and test the knowledge you ve gained from reading Financial Statement Analysis, Third Edition.

Question-and-answer sections within this workbook correspond to each chapter of Financial Statement Analysis, Third Edition, so you can use this guide in conjunction with the actual text. Alternatively, you can use the self-administered tests that are also a part of this workbook to independently practice the skill of reading and understanding financial statements. Either way, using the Financial Statement Analysis Workbook will help you expand your skills in reading and analyzing financial statements so you can successfully put your hard-won knowledge to work in the real world.

Question-and-answer sections within this workbook correspond to each chapter of Financial Statement Analysis, Third Edition, so you can use this guide in conjunction with the actual text. Alternatively, you can use the self-administered tests that are also a part of this workbook to independently practice the skill of reading and understanding financial statements. Either way, using the Financial Statement Analysis Workbook will help you expand your skills in reading and analyzing financial statements–so you can successfully put your hard-won knowledge to work in the real world.

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Financial Statement Analysis Workbook

Step-by-Step Exercises and Tests to Help You Master Financial Statement AnalysisBy Martin Fridson Fernando Alvarez

John Wiley & Sons

ISBN: 0-471-40918-9

Chapter One

PART ONE

Questions

QUESTIONS ON EACH CHAPTER

Chapter 1: The Adversarial Nature of Financial Reporting

1. Three ways that corporations can use financial reporting to enhance their value are: a. _______________________________________________

b. _______________________________________________

c. _______________________________________________

2. Corporations routinely _____________ because the appearance of ___________ receives a higher __________ multiple.

3. The following are some of the powerful limitations to continued growth faced by companies:

a. _______________________________________________

b. _______________________________________________

c. _______________________________________________

4. ____________ reached its zenith of popularity during the __________ movement of the 1960s. However, by the 1980s, the stock market had converted the ________ into

a ___________.

5. The surprise element in Manville Corporation's 1982 bankruptcy was, in part, a function of ______________.

6. Some of the stories used to sell stocks to individual investors are:

a. _______________________________________________ b. A "play" in some current economic trend such as

i. ____________________________________________

ii. ____________________________________________

c. _______________________________________________

7. The ostensible purpose of financial reporting is _______ of a corporation's earnings.

8. Over a two-year period, BGT paid L&H $35 million to develop translation software. L&H then bought BGT and the translation product along with it. The net effect was that instead ________, _________, L&H recognized _____________.

Chapter 2: The Balance Sheet

1, A study conducted on behalf of Big Five accounting firm Arthur Andersen showed that between ________ and __________, book value fell from __________% to __________% of the stock market value of public companies in the United States.

2. In the examples above, there is no accounting event because ___________.

3. As in the case of __________, the historical cost principle makes comparable companies appear quite dissimilar. The equally large _____________ of another company with low-cost debt will not be reflected on its balance sheet, simply because ____________.

4. Through stock-for-stock acquisitions, the sharp rise in equity prices during the late 1990s was transformed into ___________, despite the usual assumption that ______________.

5. A reasonable estimate of a low-profit company's true equity value would be ____________.

6. Determining the cost of capital is a notoriously controversial subject in the financial field, complicated by __________ and ____________.

7. Instead of striving for theoretical purity on the matter, analysts should adopt a _______________, using the measure of equity value ____________.

8. Users of financial statements can process only ____________, and they do not always have _____________.

9. Where feasible, users of financial statements should also solicit as ________________ regarding risks not spelled out __________.

Chapter 3 The Income Statement

1. Students of financial statements must keep up with ___________ of the past few years in transforming __________ into ____________.

2. Besides facilitating comparisons between a company's present and past results, the ____________ can highlight important facts _____________.

3. The more widely diversified pharmaceutical manufacturers can be expected to have ______________ percentage ____________, as well as _________________ percentage ____________ expenses, than industry peers that focus exclusively on ____________.

4. Executives whose bonuses rise ____________ have a strong incentive not only ________________, but also to use ________________.

5. Along with _______________, another major expense category that can be controlled through ______________ is ______________.

6. A company knows that creating ________________ expectations about _______________ can raise _______________ and lower _______________.

7. An extraordinary item is reported on an _____________ basis, below the _________________ from continuing operations.

8. In recent years, _______________ has become a catchall for charges that companies wish analysts to consider ____________, but which do not qualify for ________________.

9. The most dangerous trap that users of financial statements must avoid walking into, however, is inferring that the term restructuring connotes __________.

10. The purpose of providing pro forma results was to help analysts ____________ accurately when some event caused ___________ to convey a misleading impression.

11. Computer software producers got into the act by _______________ from the expenses considered in calculating _______________.

12. In fact, analysts who hope to forecast future financial results accurately must apply ___________________ and set aside genuinely __________________.

13. An older, but not obsolete, device for beefing up reported income is ________________.

14. A corporation can easily accelerate its sales growth by _______________ and ________________. Creating genuine value for shareholders though is more difficult, although unwary investors sometimes fail to recognize the distinction.

15. If Company A generates external growth by acquiring Company B and neither Company A nor its new subsidiary increases its profitability, then ____________ the merged companies is ___________________ than the sum of the two companies' values.

16. As synergies go, projections of economies of scale in combinations of companies _________________ tend to be more plausible than economies of scope purportedly available to companies in _________________ businesses.

17. Professor Beneish's statistical analysis shows that the presence of the following factors increases the probability of earnings manipulation:

a. ______________________________________________

b. ______________________________________________

c. ______________________________________________

d. ______________________________________________

Chapter 4: The Statement of Cash Flows

1. For financial reporting (as opposed to ___________) purposes, a publicly owned company generally seeks to maximize _______________, which investors use as a basis for valuing its shares.

2. In a classic LBO, a group of investors acquires a business by _________ and ____________ the balance.

3. Analysts evaluating the investment merits of the LBO proposal would miss the point if they focused on _________________ rather than __________________.

4. The essential idea of a _______________ is to acquire a business with a sliver of equity and a large amount of ____________, and then pay off the debt with ______________.

5. The EBITDA multiple may come down because _____________ perceive that the LBO organizers ______________ on capital spending during their stewardship, meaning that _____________ will...

Details zur Ausgabe

• Verlag: Wiley
• Erscheinungsdatum: 2002
• Sprache: Englisch
• ISBN 10: 0471409189
• ISBN 13: 9780471409182
• Einband: Taschenbuch
• Auflage: 3
• Anzahl der Seiten: 168
• Kontakt zum Hersteller: Wiley-VCH GmbH; product_safety@wiley.com; ; Boschstrasse 12; Weinheim; 69469; Deutschland