Includes index.

Reading between the Lines -- The Adversarial Nature of Financial Reporting -- The Purpose of Financial Reporting -- The Flaws in the Reasoning -- Small Profits and Big Baths -- Maximizing Growth Expectations -- Downplaying Contingencies -- The Importance of Being Skeptical -- The Basic Financial Statements -- The Balance Sheet -- The Value Problem -- Issues of Comparability -- "Instantaneous" Wipeout of Value -- How Good Is Goodwill? -- Losing Value the Old-Fashioned Way -- True Equity Is Elusive -- Pros and Cons of a Market-Based Equity Figure -- Undisclosed Hazards -- The Common Form Balance Sheet -- The Income Statement -- Making the Numbers Talk -- How Real Are the Numbers? -- The Statement of Cash Flows -- The Cash Flow Statement and the LBO -- Analytical Applications -- Cash Flow and the Company Life Cycle -- The Concept of Financial Flexibility -- In Defense of Slack -- A Closer Look at Profits -- What is Profit? -- Bona Fide Profits versus Accounting Profits -- What Is Revenue? -- Which Costs Count? -- How Far Can the Concept Be Stretched? -- Revenue Recognition -- Informix's Troubles Begin -- Calling the Signals -- Astray on Layaway -- Recognizing Membership Fees -- A Potpourri of Liberal Revenue Recognition Techniques -- Expense Recognition -- AOL's Search for Wiggle Room -- IBM's Innovative Expense Reduction -- Simple Analysis Foils Elaborate Deception -- Oxford's Plans Go Astray -- The Applications and Limitations of EBITDA -- EBIT, EBITDA, and Total Enterprise Value -- The Role of EBITDA in Credit Analysis -- Abusing EBITDA -- A More Comprehensive Cash Flow Measure -- Working Capital Adds Punch to Cash Flow Analysis -- The Reliability of Disclosures and Audits -- An Artful Deal -- Death Duties -- Chainsaw Al -- Stumbling Down the Audit Trial -- Mergers-and-Acquisitions Accounting -- The Twilight of Pooling-of-Interests Accounting -- Maximizing Postacquisition Reported Earnings -- Managing Acquisition Dates and Avoiding Restatements -- Profits in Pensions -- An Admonition from the SEC -- Forecasts and Security Analysis -- Forecasting Financial Statements -- A Typical One-Year Projection -- Sensitivity Analysis with Projected Financial Statements -- How Accurate Are Projections in Practice? -- Projecting Financial Flexibility -- Pro Forma Financial Statements -- Multiyear Projections -- Credit Analysis -- Balance Sheet Ratios -- Income Statement Ratios -- Statement of Cash Flows Ratios -- Combination Ratios -- Relating Ratios to Credit Risk -- Equity Analysis -- The Dividend Discount Model -- The Price-Earnings Ratio -- Why P/E Multiples Vary -- The Du Pont Formula -- Valuation through Restructuring Potential.

The 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, you'll 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 you're evaluating a company's 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 today's volatile markets and uncertain economy. 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.