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.

Ch 1 Introduction to Investing and Valuation Ch 2 Introduction to the Financial Statements PART I: FINANCIAL STATEMENTS AND VALUATION Ch 3 How Financial Statements Are Used in Valuation Ch 4 Cash Accounting, Accrual Accounting, and Discounted Cash Flow Valuation Ch 5 Accrual Accounting and Valuation: Pricing Book Values Ch 6 Accrual Accounting and Valuation: Pricing Earnings Ch 7 Valuation and Active Investing PART II: THE ANALYSIS OF FINANCIAL STATEMENTS Ch 8 Viewing the Business Through the Financial Statements Ch 9 The Analysis of the Statement of Shareholders' Equity Ch10 The Analysis of the Balance Sheet and Income Statement Ch11 The Analysis of the Cash Flow Statement Ch12 The Analysis of Profitability Ch13 The Analysis of Growth and Sustainable Earnings PART III: FORECASTING AND VALUATION ANALYSIS Ch14 The Value of Operations and the Evaluation of Enterprise Price-to-Book Ratios and Price-Earnings Ratios Ch15 Anchoring on the Financial Statements: Simple Forecasting and Simple Valuation Ch16 Full-Information Forecasting, Valuation, and Business Strategy Analysis PART IV: ACCOUNTING ANALYSIS AND VALUATION Ch17 Creating Accounting Value and Economic Value Ch18 Analysis of the Quality of Financial Statements PART V: THE ANALYSIS OF RISK AND RETURN Ch19 The Analysis of Equity Risk and Return Ch20 The Analysis of Credit Risk and Return