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| Preface to Fourth Edition | |
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| Acknowledgments | |
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| Reading between the Lines | |
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| The Adversarial Nature of Financial Reporting | |
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| The Purpose of Financial Reporting | |
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| The Flaws in the Reasoning | |
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| Small Profits and Big Baths | |
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| Maximizing Growth Expectations | |
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| Downplaying Contingencies | |
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| The Importance of Being Skeptical | |
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| Conclusion | |
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| The Basic Financial Statements | |
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| The Balance Sheet | |
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| The Value Problem | |
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| Comparability Problems in the Valuation of Financial Assets | |
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| Instantaneous Wipeout of Value | |
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| How Good Is Goodwill? | |
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| Losing Value the Old-Fashioned Way | |
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| True Equity Is Elusive | |
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| Pros and Cons of a Market-Based Equity Figure | |
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| The Common Form Balance Sheet | |
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| Conclusion | |
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| The Income Statement | |
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| Making the Numbers Talk | |
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| How Real Are the Numbers? | |
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| Conclusion | |
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| The Statement of Cash Flows | |
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| The Cash Flow Statement and the Leveraged Buyout | |
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| Analytical Applications | |
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| Cash Flow and the Company Life Cycle | |
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| The Concept of Financial Flexibility | |
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| In Defense of Slack | |
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| Conclusion | |
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| A Closer Look at Profits | |
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| What Is Profit? | |
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| Bona Fide Profits versus Accounting Profits | |
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| What Is Revenue? | |
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| Which Costs Count? | |
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| How Far Can the Concept Be Stretched? | |
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| Conclusion | |
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| Revenue Recognition | |
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| Channel-Stuffing in the Drug Business | |
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| A Second Take on Earnings | |
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| Astray on Layaway | |
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| Recognizing Membership Fees | |
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| A Potpourri of Liberal Revenue Recognition Techniques | |
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| Fattening Earnings with Empty Calories | |
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| Tardy Disclosure at Halliburton | |
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| Managing Earnings with Rainy Day Reserves | |
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| Fudging the Numbers: A Systematic Problem | |
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| Conclusion | |
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| Expense Recognition | |
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| Nortel's Deferred Profit Plan | |
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| Grasping for Earnings at General Motors | |
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| Time-Shifting at Freddie Mac | |
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| Conclusion | |
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| The Applications and Limitations of EBITDA | |
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| EBIT, EBITDA, and Total Enterprise Value | |
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| The Role of EBITDA in Credit Analysis | |
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| A busing EBITDA | |
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| A More Comprehensive Cash Flow Measure | |
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| Working Capital Adds Punch to Cash Flow Analysis | |
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| Conclusion | |
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| The Reliability of Disclosure and Audits | |
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| An Artful Deal | |
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| Death Duties | |
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| Systematic Problems in Auditing | |
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| Conclusion | |
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| Mergers-and-Acquisitions Accounting | |
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| Maximizing Postacquisition Reported Earnings | |
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| Managing Acquisition Dates and Avoiding Restatements | |
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| Conclusion | |
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| Is Fraud Detectable? | |
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| Telltale Signs of Manipulation | |
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| Fraudsters Know Few Limits | |
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| Enron: A Media Sensation | |
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| HealthSouth's Excruciating Ordeal | |
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| Milk and Other Liquid Assets | |
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| Conclusion | |
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| Forecasts and Security Analysis | |
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| Forecasting Financial Statements | |
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| A Typical One-Year Projection | |
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| Sensitivity Analysis with Projected Financial Statements | |
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| Projecting Financial Flexibility | |
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| Pro Forma Financial Statements | |
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| Pro Forma Statements for Acquisitions | |
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| Multiyear Projections | |
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| Conclusion | |
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| Credit Analysis | |
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| Balance Sheet Ratios | |
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| Income Statement Ratios | |
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| Statement of Cash Flows Ratios | |
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| Combination Ratios | |
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| Relating Ratios to Credit Risk | |
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| Conclusion | |
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| Equity Analysis | |
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| The Dividend Discount Model | |
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| The Price-Earnings Ratio | |
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| Why P/E Multiples Vary | |
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| The Du Pont Formula | |
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| Valuation through Restructuring Potential | |
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| Conclusion | |
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| Appendix: Explanation of Pro Forma Adjustments for Hertz Global Holdings, Inc./DTG | |
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| Notes | |
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| Glossary | |
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| Bibliography | |
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| About the Authors | |
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| Index | |