Financial Statement Analysis: A Practitioner's Guide (Wiley Finance) - Hardcover

Fridson, Martin S.; Alvarez, Fernando

Hardcover

ISBN 10: 1119457149 ISBN 13: 9781119457145

Publisher: Wiley, 2022

Synopsis

The updated, real-world guide to interpreting and unpacking GAAP and non-GAAP financial statements

In Financial Statement Analysis, 5th Edition, leading investment authority Martin Fridson returns with Fernando Alvarez to provide the analytical framework you need to scrutinize financial statements, whether you're evaluating a company's stock price or determining valuations for a merger or acquisition. Rather than taking financial statements at face value, you'll learn practical and straightforward analytical techniques for uncovering the reality behind the numbers. This fully revised and up-to-date 5th Edition offers fresh information that will help you to evaluate financial statements in today's volatile markets and uncertain economy. The declining connection between GAAP earnings and stock prices has introduced a need to discriminate between instructive and misleading non-GAAP alternatives. This book integrates the alternatives and provides guidance on understanding the extent to which non-GAAP reports, particularly from US companies, may be biased.

Understanding financial statements is an essential skill for business professionals and investors. Most books on the subject proceed from the questionable premise that companies' objective is to present a true picture of their financial condition. A safer assumption is that they seek to minimize the cost of raising capital by portraying themselves in the most favorable light possible. Financial Statement Analysis teaches readers the tricks that companies use to mislead, so readers can more clearly interpret statements.

• Learn how to read and understand financial statements prepared according to GAAP and non-GAAP standards
• Compare CFROI, EVA, Valens, and other non-GAAP methodologies to determine how accurate companies' reports are
• Improve your business decision making, stock valuations, or merger and acquisition strategy
• Develop the essential skill of quickly and accurately gathering and assessing information from financial statements of all types

Professional analysts, investors, and students will gain valuable knowledge from this updated edition of the popular guide. Filled with real-life examples and expert advice, Financial Statement Analysis, 5th Edition, will help you interpret and unpack financial statements.

About this title

About the Author

MARTIN S. FRIDSON is Chief Investment Officer at Lehmann Livian Fridson Advisors, a New York-based investment management firm founded on fundamental security analysis. He is past President of the Fixed Income Analysts Society.

FERNANDO ALVAREZ has been a faculty member at Babson College, Rutgers University School of Business, NYU-Stern, and Columbia Business School. His research interests include the interaction of strategy, financial statement analysis, valuation models, and stock market reactions to business decisions.

From the Back Cover

PRAISE FOR FINANCIAL STATEMENT ANALYSIS, FIFTH EDITION

“Anyone can get lucky in the short term, but to succeed in the long term requires expert financial skills. There is no better guide than Marty Fridson.”

―John Paulson, President, Paulson & Co.

“Read Financial Statement Analysis and avoid getting duped by financial shenanigans. This book will protect you and your investments.”

― Wesley R. Gray, PhD, CEO of Alpha Architect, and co-author of Quantitative Value and Quantitative Momentum

“Financial Statement Analysis is an almost indispensable book for portfolio managers, securities analysts, and businessmen who want deep insights into how financial statements can be misleading and how they can be helpful in understanding the true strengths and weaknesses of companies. The book should be required reading for all students interested in careers in finance or general business.”

― Edgar Wachenheim III, CEO, founder, and chairman of Greenhaven Associates; author of Common Stocks and Common Sense: The Strategies, Analyses, Decisions, and Emotions of a Particularly Successful Value Investor

“Once again, Fridson and Alvarez provide analysts and investors with the necessary, but all too often overlooked truth about how to approach financial statement and corporate profit analysis. Anyone who wants to understand business should study the lessons in this book.”

―David Trainer, CEO, New Constructs

“Most financial analysis books are written by academics with limited to no real-life experience. This book is unique since it clearly reflects the extensive practical experience of the authors, along with their knowledge of relevant research. I particularly liked the chapters on data reliability, M&As, fraud, forecasting, and credit analysis. This book is at the top of financial analysis books available, to be used as a text in university financial analysis courses, as well as a source of knowledge to investment professionals.”

― Baruch Lev, Philip Bardes Professor of Accounting and Finance, New York University; author of The End of Accounting and the Path Forward for Investors and Managers

“Over my decades of involvement with high-yield bonds, Marty Fridson has been the leading speaker of truth. As he so accurately states in Financial Statement Analysis, the credit investor is required to engage in a game of cat-and-mouse with company’s management intent on minimizing their cost of capital by putting a positive gloss on their financial statements. The Fifth Edition of Marty’s terrific book is the bible on how to detect and deal with these efforts.”

―Howard Marks, Co-Chairman, Oaktree Capital Management

From the Inside Flap

Financial statement analysis is a foundational skill for people involved in investment management, corporate finance, commercial lending, and the credit markets. It has become an increasingly complicated endeavor, with corporate financial statements becoming ever more difficult to understand and interpret.

The newly revised Fifth Edition of Financial Statement Analysis: A Practitioner’s Guide delivers a straightforward and practical guide to overcoming the challenges inherent to deciphering modern corporate financial statements.

Leading investment professional Martin Fridson and financial reporting expert Fernando Alvarez offer readers a concise and authoritative resource dedicated to outlining the analytical framework required to scrutinize financial statements. Regardless of whether you’re evaluating a company’s stock price or valuing a firm for a merger or acquisition, you’ll be in a better position after reading this book.

The book is written from the premise that most firms attempt to minimize the cost of raising capital by portraying themselves, through their financial statements, in the most favorable light possible. It teaches the strategies that companies use―and for which you must be on guard―to highlight or minimize specific aspects of their financial position.

You’ll learn how to effectively evaluate financial statements in volatile markets, read valuable new case studies on fraudulent financial reporting, see tips for maximizing the accuracy of forecasts, use a structured approach to credit and equity evaluation, and discover how earnings can be exaggerated or fabricated.

Perfect for professional securities analysts and investors, Financial Statement Analysis, Fifth Edition will also earn a place in the libraries of undergraduate and graduate students in finance and business seeking a one-stop resource that examines how to understand and interpret complex financial statements.

Edition details

• Publisher: Wiley
• Publication date: 2022
• Language: English
• ISBN 10: 1119457149
• ISBN 13: 9781119457145
• Binding: Hardcover
• Edition number: 5
• Number of pages: 448