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Exploring the Essential Features of “Martin Fridson & Fernando Alvarez – Financial Statement Analysis (3rd Ed.)”
Financial Statement Analysis: A Practitioner’s Guide, 3rd Edition
by Martin Fridson (Author), Fernando Alvarez (Author)
Editorial Reviews
Review
In Financial Statement Analysis: A Practitioner?s Guide, Third Edition (New York: John Wiley & Sons, Inc., 2002), Martin Fridson and Fernando Alvarez detail a number of gimmicks that companies have employed, including:
- Booking deliveries of computer software to resellers as sales, despite undisclosed agreements permitting the return of unsold merchandise for refunds.
- Helping managers to achieve their annual sales targets by announcing a price increase, effective January 2, to induce customers to order before year-end, even though the hike puts the company out of line with the competition.
- Taking credit for volume-based rebates from suppliers before purchases of merchandise reach the level needed to qualify for the rebates.
Surprisingly, to many readers, the slipperiness depicted in Financial Statement Analysis is not limited to penny-stock companies or high-flying initial public offerings. A number of the book?s case studies involve widely respected Fortune 500 corporations. The authors quote an official of one such company who freely admits that when a division is in danger of missing its quarterly profit goal, management tries to make an acquisition in the waning days so that it can count the unit?s earnings for the entire period.Fridson and Alvarez do not merely describe and deplore opaque financial reporting practices. They document a number of cases in which analysts successfully anticipated stock and bond price shocks, using financial ratios and publicly available information from outside the statements. The authors also provide practical advice on making financial projections. (Extra Credit, The Journal of Global High Yield Bond Research)
Financial Statement Analysis, by junk bond guru Martin Fridson, is my No. 1 pick for those at an intermediate level. Fridson does a great job of explaining the various forces at work in corporate financial statement preparation, and also has valuable insights into issues such as pro form a income statements and revenue recognition practices. – Street.com
From the Inside Flap
Financial Statement AnalysisThe goal of financial statement analysis is to shed light on the true financial condition of a company so realistic valuations can be determined for investment, lending, or merger and acquisition purposes. This important process has become increasingly complex over the years as corporate financial statements have become more difficult to decipher. But with Financial Statement Analysis, Third Edition, youll learn how to handle the practical challenges that are part of this business.
In Financial Statement Analysis, Third Edition, leading investment authority Martin Fridson returns with NYU Professor Fernando Alvarez to provide the analytical framework you need to scrutinize financial statements, whether youre evaluating a companys stock price or determining valuations for a merger or acquisition. This fully revised and up-to-date Third Edition offers detailed, fresh information that will allow you to evaluate financial statements in todays volatile markets and uncertain economy.
This definitive guide to the analysis and use of financial statements arms investors, money managers, bankers, and financial analysts with:
- Information that will allow you to “read between the lines” of financial statements and help you get past the biased portrait of a companys performance as represented by its financial statements
- Guidelines on how to interpret balance sheets, income statements, and cash flow statements
- A solid understanding of the lifeblood of the capitalist systemprofitsand how earnings can be exaggerated or even fabricated
- Tips for maximizing the accuracy of forecasts and a structured approach to credit and equity evaluation
With expanded coverage that includes merger accounting, pension issues, integrity of audits, and the addition of valuable new case studies, Financial Statement Analysis, Third Edition teaches analysts and professional investors new techniques for understanding and interpreting financial statements that are designed to conceal more than reveal.
Filled with real-life examples and expert advice, this comprehensive guide will motivate you to undertake genuine, goal-oriented analysis instead of simply going through the motions of calculating standard financial statement analysis. Pick up Financial Statement Analysis, Third Edition and you will acquire all the insight and professional know-how you need to find the facts behind the fiction of most corporate financial statements.
From the Back Cover
Praise for Financial Statement Analysis
A Practitioners Guide
Third Edition”This is an illuminating and insightful tour of financial statements, how they can be used to inform, how they can be used to mislead, and how they can be used to analyze the financial health of a company.”
Professor Jay O. Light
Harvard Business School
“Financial Statement Analysis should be required reading for anyone who puts a dime to work in the securities markets or recommends that others do the same.”
Jack L. Rivkin
Executive Vice President (retired)
Citigroup Investments
“Fridson and Alvarez provide a valuable practical guide for understanding, interpreting, and critically assessing financial reports put out by firms. Their discussion of profits quality of earnings is particularly insightful given the recent spate of reporting problems encountered by firms. I highly recommend their book to anyone interested in getting behind the numbers as a means of predicting future profits and stock prices.”
Paul Brown
Chair Department of Accounting
Leonard N. Stern School of Business, NYU
“Let this book assist in financial awareness and transparency and higher standards of reporting, and accountability to all stakeholders.”
Patricia A. Small
Treasurer Emeritus, University of California
Partner, KCM Investment Advisors
“This book is a polished gem covering the analysis of financial statements. It is thorough, skeptical and extremely practical in its review.”
Daniel J. Fuss
Vice Chairman
Loomis, Sayles & Company, LP
About the Author
MARTIN FRIDSON is Managing Director at Merrill Lynch & Company and a member of Institutional Investor’s All-America Fixed Income Research Team. His other books include How to Be a Billionaire, It Was a Very Good Year, and Investment Illusions, all published by Wiley. He is a past governor of the Association for Investment Management and Research.
FERNANDO ALVAREZ is Clinical Associate Professor in the Berkley Center for Entrepreneurial Studies at the Stern School of Business at NYU. His current research focuses on the management of cash flows resulting from changes in working capital requirements, the structure of cash flows, and the sources and uses of capital for the entrepreneurial firm. His research has been funded by the MacArthur Foundation, the Kaufman Foundation, U.S. Trust of Boston, and Wells Fargo Bank.
Product details
Publisher : Wiley; 3rd edition (March 15, 2002)
Language : English
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