Financial Reporting and Statement Analysis : A Strategic Perspective

Name: Financial Reporting and Statement Analysis : A Strategic Perspective
Price: 4.04 USD
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ISBN: 9780030238116

ISBN-10: 0030238110

ISBN-13: 9780030238116

Edition: 4th 1999

Authors: Clyde P. Stickney

List price: $120.95

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Book details

List price: $120.95
Edition: 4th
Copyright year: 1999
Publisher: Cengage South-Western
Binding: Paperback
Pages: 944
Size: 7.75" wide x 9.50" long x 1.50" tall
Weight: 3.432
Language: English

Clyde P. Stickney is the Signal Companies' Professor of Management, Emeritus at the Amos Tuck School of Business Administration, Dartmouth College. He received his DBA from Florida State University and taught at the University of Chicago and the University of North Carolina at Chapel Hill before joining the Tuck School in 1977. He has also taught at business schools in Japan, Australia, Finland, and Germany. Prof. Stickney has authored and coauthored books on financial accounting, managerial accounting, and financial statement analysis.

Foundation for Effective Financial Statement Analysis	p. 1
Overview of Financial Reporting and Financial Statement Analysis	p. 3
Learning Objectives	p. 3
Overview of Financial Statement Analysis	p. 4
Identify the Industry Economic Characteristics	p. 5
Tools for Studying Industry Economics	p. 8
Value Chain Analysis	p. 8
Porter's Five Forces Classification	p. 9
Economics Attributes Framework	p. 11
Identify the Company Strategy	p. 12
Framework for Strategy Analysis	p. 13
Application of Strategy Framework to Coke	p. 14
Principal Financial Statements and Notes	p. 15
Balance Sheet--Measuring Financial Position	p. 15
Income Statement--Measuring Operating Performance	p. 21
Statement of Cash Flows	p. 28
Summary of Financial Statements and Notes	p. 30
Profitability and Risk Analysis	p. 30
Tools of Profitability and Risk Analysis	p. 32
Valuation of Firms	p. 36
Price-Earnings Ratio	p. 36
Market-to-Book-Value Ratio	p. 36
Role of Financial Statement Analysis in an Efficient Capital Market	p. 37
Sources of Financial Statement Information	p. 38
Summary	p. 39
Problems and Cases	p. 40
Nike: Somewhere Between a Swoosh and a Slam Dunk	p. 54
Income Flows Versus Cash Flows: Key Relationships in Understanding the Dynamics of a Business	p. 64
Learning Objectives	p. 64
Income Flows, Cash Flows, and Life Cycle Relations	p. 65
Net Income and Cash Flow from Operations	p. 65
Relationships of Cash Flows from Operating, Investing, and Financing Activities	p. 69
Illustrations of Cash Flow Relations	p. 71
Preparing the Statement of Cash Flows	p. 79
Algebraic Formulation	p. 79
Classifying Changes in Balance Sheet Accounts	p. 81
Illustration of Procedure for Preparing Cash Flow Statement	p. 85
Summary	p. 88
Problems and Cases	p. 89
W.T. Grant Co.	p. 102
Introduction to Profitability and Risk Analysis	p. 124
Learning Objectives	p. 124
Profitability Analysis	p. 125
Rate of Return on Assets	p. 125
Disaggregating ROA	p. 127
Analyzing the Profit Margin	p. 128
Analyzing Assets Turnover	p. 135
Analysis of Segment Data	p. 140
Rate of Return on Common Shareholders' Equity	p. 142
Risk Analysis	p. 145
Short-Term Liquidity Risk	p. 147
Long-Term Solvency Risk	p. 151
Interpreting Financial Statement Ratios	p. 155
Comparisons with Corresponding Ratios of Earlier Periods	p. 155
Comparisons with Corresponding Ratios of Other Firms	p. 156
Summary	p. 157
Earnings Per Common Share	p. 160
Problems and Cases	p. 163
Profitability and Risk Analysis of Wal-Mart Stores	p. 182
Specialty Retailing Industry Analysis: The Gap and the Limited	p. 187
Impact of Generally Accepted Accounting Principles on Profitability and Risk Analysis	p. 198
Relevant Financial Statement Data for Analysis	p. 201
Learning Objectives	p. 201
The Raw Data of Financial Statements	p. 202
Reporting Earnings and Economic Value-Added	p. 203
Earnings Sustainability	p. 205
Discontinued Operations	p. 206
Extraordinary Items	p. 210
Changes in Accounting Principles	p. 211
Impairment Losses on Long-Lived Assets	p. 215
Restructuring Charges	p. 219
Changes in Estimates	p. 222
Gains and Losses from Peripheral Activities	p. 225
Management's Analysis of Operations	p. 227
Summary of Earnings Sustainability	p. 228
Earnings Measurement and Management	p. 229
Earnings Measurement	p. 229
Earnings Management	p. 229
Restated Financial Statement Data	p. 232
Account Classification Differences	p. 235
Reporting Period Differences	p. 236
Financial Reporting Worldwide	p. 239
Summary	p. 243
Problems and Cases	p. 244
International Paper: A Recurring Dilemma	p. 264
Tanaguchi Corporation--Part A	p. 269
Unconsolidated Financial Statements for Tanaguchi Corporation	p. 272
Comparison of U.S. and Japanese GAAP	p. 275
Tanaguchi Corporation--Part B	p. 280
Generally Accepted Accounting Principles: Income Recognition and Asset Valuation	p. 283
Learning Objectives	p. 283
Income Recognition	p. 284
Income Recognition and Earnings Management	p. 285
Criteria for Revenue Recognition	p. 286
Criteria for Expense Recognition	p. 289
Application of Revenue and Expense Recognition Criteria	p. 289
Income Recognition for Long-Term Contractors	p. 293
Revenue Recognition When Cash Collectibility Is Uncertain	p. 297
Disclosure of Revenue Recognition Method	p. 299
Inventory Cost Flow Assumption	p. 302
FIFO	p. 302
LIFO	p. 303
Weighted Average	p. 306
Conversion from LIFO to FIFO	p. 306
Stock Price Reaction to Changes in Inventory Cost Flow Assumption	p. 310
Earnings Sustainability and the Cost Flow Assumption	p. 310
Accounting for Fixed Assets	p. 312
Asset Valuation	p. 313
Depreciable Life	p. 314
Depreciation Method	p. 316
Impairment of Long-Lived Assets	p. 317
Earnings Sustainability and Fixed Asset Reporting	p. 318
Accounting for Intangible Assets	p. 320
Research and Development Costs	p. 321
Software Development Costs	p. 322
Goodwill	p. 324
Earnings Sustainability and Intangible Asset Reporting	p. 325
Valuing Intangibles--Is It Possible?	p. 326
Summary	p. 328
Accounting for the Effects of Changing Prices	p. 328
Problems and Cases	p. 334
Arizona Land Development Company	p. 343
Chiron Corporation--An RandD Puzzle	p. 353
Corporation Industrial Sanluis: Coping with Changing Prices	p. 356
America Online: Online or Off-Track	p. 360
Generally Accepted Accounting Principles: Liability Recognition and Related Expenses	p. 370
Learning Objectives	p. 370
Principles of Liability Recognition	p. 371
Obligations with Fixed Payment Dates and Amounts	p. 372
Obligations with Fixed Payment Amounts but Estimated Payment Dates	p. 372
Obligations with Estimated Payment Dates and Amounts	p. 373
Obligations Arising from Advances from Customers on Unexecuted Contracts and Agreements	p. 373
Obligations Under Mutually Unexecuted Contracts	p. 373
Contingent Obligations	p. 374
Controversial Issues in Liability Recognition	p. 375
Issuance of Hybrid Securities	p. 375
Off-Balance-Sheet Financing Arrangements	p. 376
Derivative Instruments	p. 380
Principles of Liability Valuation	p. 386
Leases	p. 388
Operating Lease Method	p. 389
Capital Lease Method	p. 390
Choosing the Accounting Method	p. 392
Effects on Lessor	p. 394
Lease Accounting for Tax Purposes	p. 395
Converting Operating Leases to Capital Leases	p. 395
Retirement Benefits	p. 398
Pensions	p. 398
Postretirement Benefits Other Than Pensions	p. 410
Income Taxes	p. 411
Overview Of Income Tax Accounting	p. 411
Required Income Tax Disclosures	p. 414
Assessing a Firm's Tax Position	p. 422
Income Tax Disclosures	p. 423
Is the Deferred Tax Liability Really a Liability?	p. 424
Understanding Reserves in the Financial Statements	p. 425
Nature of a Reserve Account	p. 426
Use of Reserve Accounts	p. 426
Summary of Reserves	p. 428
Summary	p. 429
Problems and Cases	p. 429
American Airlines and United Airlines: A Pension for Debt	p. 446
Sun Microsystems: A Not-Too-Taxing Experience	p. 453
CIFRA: Remodeling the Financial Statements	p. 456
Generally Accepted Accounting Principles: Intercorporate Entities	p. 461
Learning Objectives	p. 461
Corporate Acquisitions	p. 462
Purchase Method	p. 464
Pooling of Interests Method	p. 465
Criteria for Pooling of Interests	p. 466
Purchase versus Pooling of Interest Reporting: Which Is Preferable to Analysts?	p. 467
Corporate Acquisitions and Income Taxes	p. 470
Corporate Disclosures on Acquisitions	p. 471
Investments in Securities	p. 473
Types of Investments	p. 474
Minority, Passive Investments	p. 475
Minority, Active Investments	p. 478
Majority, Active Investments	p. 480
Joint Venture Investments	p. 489
Income Tax Consequences of Investments in Securities	p. 490
Foreign Currency Translation	p. 491
Functional Currency Concept	p. 491
Translation Methodology--Foreign Currency Is Functional Currency	p. 493
Translation Methodology--U.S. Dollar Is Functional Currency	p. 496
Implications of Functional Currency Determination	p. 498
Interpreting Financial Statement Disclosures	p. 501
Foreign Currency Translation and Income Taxes	p. 502
Segment Reporting	p. 503
Definition of Segments	p. 503
Transfer Pricing and Treatment of Central Corporate Expenses	p. 504
Segments Items Disclosed	p. 504
Summary	p. 505
Problems and Cases	p. 505
Fisher Corporation	p. 522
Clark Equipment Company: Analyzing a Joint Problem	p. 541
Loucks Corporation: Obtaining Security in Translation	p. 547
Exploring Profitability and Risk Analysis in More Depth	p. 550
Profitability Analysis: An Extended Look	p. 553
Learning Objectives	p. 553
Rate of Return on Assets	p. 553
Interpreting the Rate of Return on Assets	p. 554
Relating ROAs and Value Chain Analysis	p. 566
Supplementing ROAs in Profitability Analysis	p. 569
Rate of Return on Common Shareholders' Equity	p. 572
Behavior of ROCE	p. 573
Summary	p. 577
Problems and Cases	p. 578
Computer Workstation Industry Analysis: Hewlett-Packard and Sun Microsystems	p. 592
Wireless Telecommunications Industry Analysis: Motorola, Nokia, and Ericsson	p. 603
Risk Analysis: An Extended Look	p. 619
Learning Objectives	p. 619
Definition of Risk	p. 620
Analyzing Credit Risk	p. 620
Sources of Debt Financing	p. 620
The C's of Credit Risk Analysis	p. 621
Summary of Credit Risk Analysis	p. 627
Analyzing Bankruptcy Risk	p. 628
The Bankruptcy Process	p. 628
Models of Bankruptcy Prediction	p. 628
Application of Bankruptcy Prediction Models to W.T. Grant Company	p. 636
Other Methodological Issues in Bankruptcy Prediction Research	p. 638
Synthesis of Bankruptcy Prediction Research	p. 640
Market Risk	p. 643
Summary	p. 648
Problems and Cases	p. 649
Massachusetts Stove Company--Bank Lending Decision	p. 653
Fly-by-Night International Group: Can This Company Be Saved?	p. 659
Millennial Technologies: Apocalypse Now	p. 669
Kroger Company: Risky Times	p. 679
Financial Statement Analysis and Valuation	p. 684
Pro Forma Financial Statements	p. 687
Learning Objectives	p. 687
Preparing Pro Forma Financial Statements	p. 688
Project Sales and Other Revenues	p. 690
Project Operating Expenses	p. 693
Project the Assets on the Balance Sheet	p. 694
Project Liabilities and Shareholders' Equity	p. 704
Project the Cost of Financing, Income Tax Expense, and the Change in Retained Earnings	p. 709
Project the Statement of Cash Flows	p. 710
Analyzing Pro Forma Financial Statements	p. 712
Summary	p. 714
Designing a Computer Spreadsheet for Pro Forma Financial Statements	p. 715
Problems and Cases	p. 722
McDonald's Corporation--A Franchising Experience	p. 731
Massachusetts Stove Company: Analyzing Strategic Options	p. 736
Valuation: Cash Flow-Based Approaches	p. 746
Learning Objectives	p. 746
Rationale for Cash Flow-Based Valuation	p. 747
Overview of Cash Flow-Based Valuation	p. 748
Periodic Cash Flows	p. 748
Residual Value	p. 755
Cost of Capital	p. 757
Illustrations of Cash Flow-Based Valuation	p. 761
Valuation of a Single Project	p. 761
Valuation of Coke	p. 764
Evaluation of Present Value of Cash Flows Valuation Method	p. 766
Summary	p. 767
Problems and Cases	p. 767
Holmes Corporation: LBO Valuation	p. 772
Rodriguez Home Center, Inc.: Equity Buyout Valuation	p. 786
Valuation: Earnings-Based Approaches	p. 794
Learning Objectives	p. 794
Price-Earnings (P-E) Ratios	p. 795
Development of Theoretical Model	p. 795
Theoretical versus Actual P-E Ratios	p. 800
Application of Theoretical P-E Model	p. 803
Summary of P-E Ratio	p. 804
Price to Book Value (P-BV) Ratios	p. 805
Development of Theoretical Model	p. 805
Application of Theoretical Model	p. 808
Using P-E Ratios and P-BV Ratios of Comparable Firms	p. 810
Summary Comments on Valuation	p. 811
Reconciling Academic Research with the Work of the Security Analyst	p. 812
Level of Aggregation Issue	p. 812
Theory Development and Practice Feed One Another	p. 813
Does the Theory of Capital Market Efficiency Get in the Way?	p. 813
Summary	p. 815
Problems and Cases	p. 815
Revco D.S., Inc.	p. 819
Kleen Cleaning Services: Pricing an Initial Public Offering	p. 833
Financial Statements for the Coca-Cola Company and Subsidiaries	p. 839
Financial Review for the Coca-Cola Company and Subsidiaries Incorporating Management's Discussion and Analysis	p. 871
Output of Financial Statement Analysis Package (FSAP) for the Coca-Cola Company and Subsidiaries	p. 889
Index	p. 896
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