Financial Statement Analysis: A Practitioner's Guide (Frontiers in Finance Series)

This introduction to the analysis of financial statements has been revised to incorporate new examples that reflect contemporary financial realities. The author shows investors, money managers and others how to read and interpret balance sheets, income statements and other key financial documents. This edition features coverage of merger accounting, country-to-country variations in accounting methods, revenue recognition, new techniques for analyzing credit risk, inventory accounting, the auditor's role, and an analysis of the politics of rule making for financial reporting.

"Fridson uses common sense to poke at some of Wall Street′s big selling myths. A handy guide for number crunchers." Jack Willoughby Staff Writer Investment Dealers Digest

"Marty Fridson′s book is a must for every serious financial analyst and an entertaining read for all others. He has taken a dry subject and given it aspects of a mystery novel through his abundant use of real examples which bring analytical issues to life." Jack L. Rivkin Vice Chairman Director of Global Research Smith Barney

Just about anybody who′s taken a good look at a quarterly or annual report has sensed that corporate financial statements are designed to conceal more than they actually reveal. But how exactly do corporations manipulate their public financial statements to make themselves appear as attractive as possible to investors more attractive than they really may be? What important information are the accountants leaving out? And, more importantly, how can you make the numbers tell you what you really need to know? Now Financial Statement Analysis, Second Edition shows you how. Martin Fridson takes a hard look at the information that appears on financial statements, including the balance sheet, income statement, and statement of cash flows. With the help of many real–life illustrations, he explains the crucial information that corporations routinely leave out of their financial reports and the stratagems managers use to control the perceptions of investors and creditors.

Thoroughly updated and expanded to reflect today′s financial realities, Financial Statement Analysis, Second Edition arms investors, money managers, financial analysts, and bankers with:

• Detailed guidelines on how to read and interpret balance sheets, income statements, and other key financial documents
• Dozens of timely true stories that demonstrate the kinds of complications that can arise when analysts apply textbook knowledge to real–world number juggling
• A gold mine of insider tips from a seasoned professional for maximizing the accuracy of forecasts
• The kind of healthy skepticism you need to reach sound conclusions through a structured approach to credit and equity evaluation
• New and expanded coverage of revenue recognition, country–to–country variations in accounting methods, new techniques for analyzing credit risk, the auditor′s role, and more

Read Financial Statement Analysis, Second Edition and acquire all the insight and professional know–how you need to find the facts behind the fiction of most corporate financial statements.

"Martin Fridson provides a broad and very practical perspective on the art of financial statement analysis. By exploring numerous examples from recent real–world situations, the book enlivens and sharpens the issues involved in interpreting financial reports. It is a solid and interesting introduction to financial statements and their use in a variety of important analytical settings." Jay O. Light Professor of Business Administration Harvard University

"Marty Fridson′s new book is a refreshing and different approach to financial analysis. Marty goes beyond the usual exposition of ratio analysis to the much more interesting area of what the numbers really tell us. He shows ′how to make the numbers talk.′" William Smythe Executive Director, Securities Valuation Office National Association of Insurance Commissioners

"Goes beyond textbooks . . . an insightful, hands–on review of financial statements in a pragmatic context." Rosemary C. Clarke Managing Director, Public Fixed Income Research CIGNA Investments, Inc.

"If you want to become a better analyst and investor in stocks and bonds, this book is a must. A lively, entertaining, up–to–date, and in–depth discussion of the ins and outs of financial statement analysis that will increase the reader′s necessary skepticism in arriving at investment decisions." Richard S. Wilson Executive Managing Director Fitch Investors Service

"This book is comprehensive, analytical and rigorous, yet very practical and applications–oriented. Financial Statement Analysis, Second Edition can either be read from cover to cover, or used as a reference tool. The book provides a wealth of information in an extremely well written and well organized manner." Frank J. Jones, PhD Executive Vice President and Chief Investment Officer The Guardian Life Insurance of America