Financial Statement Analysis and Security Valuation
This book describes valuation as an exercise in financial statement analysis. Students learn to view a firm through its financial statements and to carry out the appropriate financial statement analysis to value the firm's debt and equity. The book takes an activist approach to investing, showing how the analyst challenges the current market price of a share by analyzing the fundamentals. With a careful assessment of accounting quality, accounting comes to life as it is integrated with the modern theory of finance to develop practical analysis and valuation tools for active investing.
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abnormal earnings growth accrual accounting amortization asset turnover balance sheet beta book value Calculate cash flow statement Chapter common equity comprehensive income continuing value core cost of capital Dell's depreciation discounted cash flow dividends dollars estimates exercise expected financial assets financial leverage financial obligations financing activities firm firm's fiscal flow from operations forma forward P/E free cash flow fundamental analysis future GAAP growth rate income statement income taxes increase Interest expense inventory investor loss market price market value measure methods million shares Minicase Nike numbers operating activities operating assets operating income P/E ratio payable payoffs payout per-share percent present value price-to-book ratio profit margin Real World Connection Reebok reformulated statements ReOI reported required return residual earnings residual operating income revenue RNOA ROCE scenarios sell share issues stock options stock price strategy Total traded unlevered valuation model value added value of equity