Foreword
Preface
Acknowledgments
About the CFA Institute Investment Series
Chapter 1 Financial Statement Analysis: An Introduction
Learning Outcomes
1 Introduction
2 Scope of Financial Statement Analysis
3 Major Financial Statements and Other Information Sources
4 Financial Statement Analysis Framework
5 Summary
Problems
Chapter 2 Financial Reporting Mechanics
Learning Outcomes
1 Introduction
2 The Classification of Business Activities
3 Accounts and Financial Statements
4 The Accounting Process
5 Accruals and Valuation Adjustments
6 Accounting Systems
7 Using Financial Statements in Security Analysis
8 Summary
Appendix 2A: A Debit/Credit Accounting System
Problems
Chapter 3 Financial Reporting Standards
Learning Outcomes
1 Introduction
2 The Objective of Financial Reporting
3 Standard-Setting Bodies and Regulatory Authorities
4 Convergence of Global Financial Reporting Standards
5 The International Financial Reporting Standards Framework
6 Effective Financial Reporting
7 Comparison of IFRS with Alternative Reporting Systems
8 Monitoring Developments in Financial Reporting Standards
9 Summary
Problems
Chapter 4 Understanding Income Statements
Learning Outcomes
1 Introduction
2 Components and Format of the Income Statement
3 Revenue Recognition
4 Expense Recognition
5 Non-Recurring Items and Non-Operating Items
6 Earnings per Share
7 Analysis of the Income Statement
8 Comprehensive Income
9 Summary
Problems
Chapter 5 Understanding Balance Sheets
Learning Outcomes
1 Introduction
2 Components and Format of the Balance Sheet
3 Current Assets and Current Liabilities
4 Non-Current Assets
5 Non-Current Liabilities
6 Equity
7 Analysis of the Balance Sheet
8 Summary
Problems
Chapter 6 Understanding Cash Flow Statements
Learning Outcomes
1 Introduction
2 Components and Format of the Cash Flow Statement
3 The Cash Flow Statement: Linkages and Preparation
4 Cash Flow Statement Analysis
5 Summary
References
Problems
Chapter 7 Financial Analysis Techniques
Learning Outcomes
1 Introduction
2 The Financial Analysis Process
3 Analytical Tools and Techniques
4 Common Ratios Used in Financial Analysis
5 Equity Analysis
6 Credit Analysis
7 Business and Geographic Segments
8 Model Building and Forecasting
9 Summary
References
Problems
Chapter 8 Financial Statement Analysis: Applications
Learning Outcomes
1 Introduction
2 Application: Evaluating Past Financial Performance
3 Application: Projecting Future Financial Performance
4 Application: Assessing Credit Risk
5 Application: Screening for Potential Equity Investments
6 Analyst Adjustments to Reported Financials
7 Summary
References
Problems
Chapter 9 Inventories
Learning Outcomes
1 Introduction
2 Cost of Inventories
3 Inventory Valuation Methods
4 The LIFO Method
5 Inventory Method Changes
6 Inventory Adjustments
7 Evaluation of Inventory Management
8 Summary
Problems
Chapter 10 Long-Lived Assets
Learning Outcomes
1 Introduction
2 Acquisition of Long-Lived Assets
3 Depreciation and Amortisation of Long-Lived Assets
4 The Revaluation Model
5 Impairment of Assets
6 Derecognition
7 Presentation and Disclosures
8 Investment Property
9 Leasing
Summary
Problems
Chapter 11 Income Taxes
Learning Outcomes
1 Introduction
2 Differences between Accounting Profit and Taxable Income
3 Determining the Tax Base of Assets and Liabilities
4 Temporary and Permanent Differences between Taxable and Accounting Profit
5 Unused Tax Losses and Tax Credits
6 Recognition and Measurement of Current and Deferred Tax
7 Presentation and Disclosure
8 Comparison of IFRS and U.S. GAAP
Summary
Problems
Chapter 12 Non-Current (Long-Term) Liabilities
Learning Outcomes
1 Introduction
2 Bonds Payable
3 Leases
4 Introduction to Pensions and Other Post-Employment Benefits
5 Evaluating Solvency: Leverage and Coverage Ratios
6 Summary
Problems
Chapter 13 Employee Compensation: Post-Employment and Share-Based
Learning Outcomes
1 Introduction
2 Pensions and Other Post-Employment Benefits
3 Share-Based Compensation
4 Summary
References
Problems
Chapter 14 Intercorporate Investments
Learning Outcomes
1 Introduction
2 Basic Corporate Investment Categories
3 Investments in Financial Assets
4 Investments in Associates
5 Joint Ventures
6 Business Combinations
7 Variable Interest and Special Purpose Entities
8 Summary
Problems
Chapter 15 Multinational Operations
Learning Outcomes
1 Introduction
2 Foreign Currency Transactions
3 Translation of Foreign Currency Financial Statements
Summary
Problems
Chapter 16 Evaluating Financial Reporting Quality
Learning Outcomes
1 Introduction
2 Discretion in Accounting Systems
3 Financial Reporting Quality: Definitions, Issues, and Aggregate Measures
4 A Framework for Identifying Low-Quality Financial Reporting
5 The Implications of Fair Value Reporting for Financial Reporting Quality: A Brief Discussion
6 Summary
Problems
Chapter 17 Integration of Financial Statement Analysis Techniques
Learning Outcomes
1 Introduction
2 Case Study 1: Long-term equity investment
3 Case Study 2: Off-Balance Sheet Leverage From Operating Leases
4 Case Study 3: Anticipating Effects Of Changes in Accounting Standards
5 Summary
Problems
Glossary
References
About the Authors
About the CFA Program
Index
