Financial Statement Analysis [antikvár]

The effective analysis of a set of financial statements requires an understanding of (1) the economics and current conditions of the businesses in which a firm is involved, (2) the particular strategies a firm has selected to compete in each of these businesses, and (3) the accounting principles and procedures underlying the financial statements. Equipped with these three essential building blocks, the analyst can assess the success of the strategies (as measured by profitability) relative to the level of risk incurred. This three-fold approach to financial statement analysis elevates it from one involving the mechanical calculation of a long list of financial statement ratios to one where the analyst has an opportunity to integrate concepts from economics, business strategy, accounting and other business disciplines. This synthesizing experience can be rewarding both intellectually and practically. The premise of this book is that effective financial statement analysis is learned best by performing analyses on actual companies. The text portion of the book sets out the important concepts and analytical tools and demonstrates their application using the financial statements of Campbell Soup Company and H.J. Heinz Company. Each chapter contains a set of short- and intermediate-length problems based for the most part on financial data of publicly held companies. Twelve cases are then presented that permit the analyst to apply these concepts and tools in a variety of industry settings. A financial statement analysis package (FSAP) that can be run on either an IBM or Apple microcomputer is available from the publisher to aid in the analytical tasks. Overview of Text Chapter 1 describes the various settings in which a financial statement analysis might be performed (for example, equity investment, credit extension, antitrust investigation) to emphasize the need to specify the purpose of the analysis before selecting the analytical tools to be used. A structural framework for assessing industry economics and business strategies is presented, along with a review of the purpose and content of each of the three principal financial statements.