Understanding Financial Statements
Material type:
TextPublication details: Harlow: Pearson Education, 2024Edition: 12thDescription: 272p.: ill.; 23cmISBN: - 978-1-292-45848-9
- 657.3
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IFM Main Campus Library Work Room processing | IFM Main Campus Library | Non-fiction | 657.3 FRA (Browse shelf(Opens below)) | Available | 0000030386 |
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| 657.3 FIN Financial Accounting: IInternational Financial Reporting Standards | 657.3 FRA Understanding Financial Statements | 657.3 FRA Understanding Financial Statements | 657.3 FRA Understanding Financial Statements | 657.42 ARO Cost Accounting: Theory, Problems and Solutions | 657.42 ARO Cost Accounting: Theory, Problems and Solutions | 657.42 ARO Cost Accounting: Theory, Problems and Solutions |
TABLE OF CONTENTS:
Chapter 1. Financial Statements: An Overview 17
Map or Maze 17
Usefulness 20
Volume of Information 20
Global Economy 23
Where to Find a Company’s Financial Statements 24
The Financial Statements 25
Notes to the Financial Statements 25
Auditor’s Report 26
Financial Reporting Reforms 27
Management Discussion and Analysis 29
Pandora (a.k.a. “PR Fluff”) 32
Proxy Statement 33
Missing and Hard-to-Find Information 33
Characteristics, Assumptions, Principles, and Basis of Accounting 34
Complexities and the Quality of Financial Reporting 35
Accounting Choices 36
Timing of Revenue and Expense Recognition 37
Discretionary Items 37
The Journey Through the Maze Continues 38
Appendix 1A. Sage Inc. 2024 Annual Report 39
Self-Test 51
Study Questions and Problems 54
Case 1.1 Analysis Case 56
Case 1.2 Comprehensive Team Analysis Case 57
Case 1.3 Locating Information in a Form 10-K 58
Case 1.4 CPA Evolution Model Curriculum Case 59
Chapter 2. The Balance Sheet 61
Financial Condition
Consolidation
Balance Sheet Date
Comparative Data
Balance Sheet Format
Common-Size Balance Sheet
Assets
Current Assets
Cash and Cash Equivalents
Marketable Securities
Accounts Receivable
Inventories
Inventory Accounting Methods
Prepaid Expenses
Property, Plant, and Equipment
Straight Line
Accelerated
Cryptocurrency
Goodwill
Other Assets
Liabilities
Current Liabilities
Accounts Payable
Short-Term Debt
Current Maturities of Long-Term Debt
Accrued Liabilities
Unearned Revenue or Deferred Credits
Deferred Federal Income Taxes
Long-Term Debt
Leases
Pensions and Postretirement Benefits
Commitments and Contingencies
Stockholders’ Equity
Common Stock
Additional Paid-In Capital
Retained Earnings
Other Equity Accounts
Quality of Financial Reporting—The Balance Sheet
Other Balance Sheet Items
Self-Test
Study Questions and Problems
Case 2.1 Analysis Case
Case 2.2 Comprehensive Team Analysis Case
Case 2.3 CPA Evolution Model Curriculum Case
Chapter 3. Income Statement, Comprehensive Income, and Statement of Stockholders’ Equity 108
The Income Statement and Comprehensive Income
Common-Size Income Statement
Net Sales
Cost of Goods Sold
Gross Profit
Operating Expense
Operating Profit
Other Income (Expense)
Equity Earnings
Unusual and Infrequent Items
Earnings before Income Taxes/Effective Tax Rate
Discontinued Operations
Net Earnings
Earnings per Common Share
Statement of Comprehensive Income
The Statement of Stockholders’ Equity
Earnings Quality, Cash Flow, and Segmental Accounting
Appendix 3A. A Guide to Earnings Quality
Self-Test
Study Questions and Problems
Case 3.1 Analysis Case
Case 3.2 Comprehensive Team Analysis Case
Case 3.3 CPA Evolution Model Curriculum Case
Chapter 4. Statement of Cash Flows 154
Why Cash Flow Is Important: An Example 155
Statement of Cash Flows: Basic Principle 156
Preparing a Statement of Cash Flows
Calculating Cash Flow from Operating Activities
Indirect Method
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Change in Cash
Analyzing the Statement of Cash Flows
Cash Flow from Operations
Nocash Corporation
Sage Inc.: Analysis of the Statement of Cash Flows 171
Sage Inc. Analysis: Cash Flow from Operating Activities
Summary Analysis of the Statement of Cash Flows
Analysis of Cash Inflows
Analysis of Cash Outflows
Qualitative Issues Relating to the Statement of Cash Flows 174
Are We There Yet?
Appendix 4A. Statement of Cash Flows—Direct Method 176
Self-Test
Study Questions and Problems
Case 4.1 Analysis Case
Case 4.2 Comprehensive Team Analysis Case
Case 4.3 CPA Evolution Model Curriculum Case
Chapter 5. The Analysis of Financial Statements 196
Objectives of Analysis 196
Sources of Information 198
Proxy Statement
Auditor’s Report
Management Discussion and Analysis
Supplementary Schedules
Form 10-K and Form 10-Q
Other Sources
Tools and Techniques 200
Common-Size Financial Statements
Key Financial Ratios
Liquidity Ratios: Short-Term Solvency
Cash Conversion Cycle or Net Trade Cycle
Activity Ratios: Asset Liquidity, Asset Management Efficiency
Leverage Ratios: Debt Financing and Coverage
Profitability Ratios: Overall Efficiency and Performance
Market Ratios
Analyzing the Data 216
Background: Economy, Industry, and Firm
Short-Term Liquidity
Operating Efficiency
Capital Structure and Long-Term Solvency
Profitability
Relating the Ratios—The Du Pont System
Projections and Pro Forma Statements
Summary of Analysis
Financial Statements: A Map
Appendix 5A. The Analysis of Segmental Data 229
Self-Test
Study Questions and Problems
Case 5.1 Analysis Case
Case 5.2 Comprehensive Team Analysis Case
Case 5.3 CPA Evolution Model Curriculum Case
Appendixes 253
Appendix A. Summary of Financial Ratios
Appendix B. Solutions to Self-Tests
Appendix C. Glossary
Index