Financial Reporting; Financial Statement Analysis and Valuation (9th Edition)

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Download Financial Reporting; Financial Statement Analysis and Valuation (9th Edition) written by James M. Wahlen, Mark Bradshaw, Stephen P. Baginski, in PDF format. This book is under the category Accounting and bearing the isbn/isbn13 number 1337668265; 1337614688/9781337668262/ 9781337614689. You may reffer the table below for additional details of the book.

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Specifications

book-author

James M. Wahlen, Mark Bradshaw, Stephen P. Baginski,

publisher

Cengage Learning; 9th edition

file-type

PDF

language

English

asin

B00M99PF78

isbn10

1337668265; 1337614688

isbn13

9781337668262/ 9781337614689


Book Description

This sale only includes Financial Reporting; Financial Statement Analysis and Valuation 9th edition’s only. No ebook included in this sale but it is available separately.

About the eBook

Learn how to conduct financial statement analysis most effectively as you perform analyses on familiar; actually real companies. Wahlen; Baginski; Bradshaw’s Financial Reporting; Financial Statement Analysis; And Valuation (9th edition) provide a balanced; complete approach as the authors teach you how to integrate concepts from finance; accounting; business strategy; economics; and other business disciplines through the ebook’s unique 6-step process. Quick checks after each section help you ensure that you have grasped the key insights; while continuing and integrative cases highlight real and known companies; including PepsiCo and Starbucks.

P.S We also have the PDF eBook. See related products below

Note: The purchase only includes Financial Reporting; Financial Statement Analysis and Valuation 9e. 

 

Additional information

book-author

James M. Wahlen, Mark Bradshaw, Stephen P. Baginski,

publisher

Cengage Learning; 9th edition

file-type

PDF

language

English

asin

B00M99PF78

isbn10

1337668265; 1337614688

isbn13

9781337668262/ 9781337614689

Table of contents


Table of contents :
Title Page……Page 2
Copyright Page……Page 3
Dedication Page……Page 4
Preface……Page 5
About the Authors……Page 18
Brief Contents……Page 20
Contents……Page 21
Chapter Overview……Page 32
Overview of Financial Statement Analysis……Page 33
How Do the Six Steps Relate to Share Pricing in the Capital Markets?……Page 36
Introducing Starbucks……Page 38
Pharmaceutical Company……Page 39
Electric Utility……Page 40
Tools for Studying Industry Economics……Page 41
Step 2: Identify the Company Strategies……Page 47
Application of Strategy Framework to Starbucks……Page 48
Step 3: Assess the Quality of the Financial Statements……Page 49
What Is Accounting Quality?……Page 50
Balance Sheet—Measuring Financial Position……Page 51
Assets—Recognition, Measurement, and Classification……Page 52
Liabilities—Recognition, Valuation, and Classification……Page 55
Shareholders’ Equity Valuation and Disclosure……Page 56
Assessing the Quality of the Balance Sheet as a Complete Representation of Economic Position……Page 57
Income Statement—Measuring Performance……Page 58
Accrual Basis of Accounting……Page 59
Classification and Format in the Income Statement……Page 61
Comprehensive Income……Page 62
Assessing the Quality of Earnings as a Complete Representation of Economic Performance……Page 63
Statement of Cash Flows……Page 64
Important Information with the Financial Statements……Page 66
Step 4: Analyze Profitability and Risk……Page 68
Tools of Profitability and Risk Analysis……Page 69
Step 5: Prepare Forecasted Financial Statements and Step 6: Value the Firm……Page 74
Role of Financial Statement Analysis in an Efficient Capital Market……Page 75
The Association between Earnings and Share Prices……Page 76
Sources of Financial Statement Information……Page 78
Questions and Exercises……Page 79
Problems and Cases……Page 81
Integrative Case 1.1 Walmart……Page 91
Case 1.2 Nike: Somewhere between a Swoosh and a Slam Dunk……Page 97
Chapter Overview……Page 106
The Mixed Attribute Measurement Model……Page 107
Asset and Liability Valuation and the Trade-Off between Relevance and Representational Faithfulness……Page 108
Accounting Quality……Page 110
Primary Valuation Alternatives: Historical Costversus Fair Value……Page 111
Contrasting Illustrations of Asset and LiabilityValuations, and Nonrecognition of Certain Assets……Page 115
Summary of U.S. GAAP and IFRS Valuations……Page 118
Income Recognition……Page 119
Accrual Accounting……Page 120
Approach 1: Economic Value Changes Recognized onthe Balance Sheet and Income Statement WhenRealized……Page 122
Approach 2: Economic Value Changes Recognized on the Balance Sheet and the Income Statement When They Occur……Page 123
Approach 3: Economic Value Changes Recognized onthe Balance Sheet When They Occur but Recognizedon the Income Statement When Realized……Page 124
Income Taxes……Page 125
Overview of Financial Reporting of Income Taxes……Page 127
Measuring Income Tax Expense: A Bit More to theStory (to Be Technically Correct)……Page 132
Income Taxes……Page 135
Overview of the Analytical Framework……Page 136
Questions and Exercises……Page 141
Problems and Cases……Page 143
Integrative Case 2.1 Walmart……Page 153
Chapter Overview……Page 154
Purpose of the Statement of Cash Flows……Page 155
Cash Flows and Financial Analysis……Page 156
The Relations among the Cash Flow Activities……Page 158
A Firm’s Life Cycle: Revenues……Page 159
A Firm’s Life Cycle: Net Income……Page 160
A Firm’s Life Cycle: Cash Flows……Page 161
Four Companies: Four Different Stages of the Life Cycle……Page 162
Understanding the Relations among Net Income, Balance Sheets, and Cash Flows……Page 165
The Operating Section……Page 166
The Relation between Net Income and Cash Flowsfrom Operations……Page 178
Preparing the Statement of Cash Flows……Page 180
Algebraic Formulation……Page 181
Classifying Changes in Balance Sheet Accounts……Page 183
Illustration of the Preparation Procedure……Page 188
Usefulness of the Statement of Cash Flows for Accounting and Risk Analysis……Page 190
Questions, Exercises, Problems, and Cases……Page 193
Integrative Case 3.1 Walmart……Page 216
Case 3.2 Prime Contractors……Page 217
Chapter Overview……Page 220
Overview of Profitability Analysis Based on Various Measures of Income……Page 221
Earnings Per Share (EPS)……Page 223
Common-Size Analysis……Page 226
Alternative Definitions of Profits……Page 228
Return on Assets (ROA)……Page 232
Adjustments for Nonrecurring or Special Items……Page 234
Two Comments on the Calculation of ROA……Page 235
Disaggregating ROA……Page 237
Return on Common Shareholders’ Equity (ROCE)……Page 238
Benchmarks for ROCE……Page 239
Relating ROA to ROCE……Page 241
Disaggregating ROCE……Page 244
Economic and Strategic Determinants ofROA and ROCE……Page 246
Trade-Offs between Profit Margin and Assets Turnover……Page 251
Analyzing the Profit Margin for ROA……Page 254
Analyzing Total Assets Turnover……Page 261
Supplementing ROA in Profitability Analysis……Page 266
Comparisons with Earlier Periods……Page 271
Comparisons with Other Firms……Page 272
Summary……Page 273
Questions and Exercises……Page 274
Problems and Cases……Page 276
Integrative Case 4.1 Profitability and Risk Analysis of Walmart Stores……Page 294
Chapter Overview……Page 306
Disclosures Regarding Risk and RiskManagement……Page 309
Firm-Specific Risks……Page 310
Commodity Prices……Page 311
Foreign Exchange……Page 312
Other Risk-Related Disclosures……Page 313
Analyzing Financial Flexibility by Disaggregating ROCE……Page 314
Analyzing Short-Term Liquidity Risk……Page 324
Current Ratio……Page 326
Quick Ratio……Page 327
Working Capital Turnover Ratios……Page 328
Debt Ratios……Page 332
Interest Coverage Ratios……Page 334
Operating Cash Flow to Total Liabilities Ratio……Page 335
Circumstances Leading to Need for the Loan……Page 336
Cash Flows……Page 337
Capacity for Debt……Page 338
Communication……Page 339
The Bankruptcy Process……Page 340
Models of Bankruptcy Prediction……Page 341
Measuring Systematic Risk……Page 347
Questions, Exercises, Problems, and Cases……Page 349
Integrative Case 5.1 Walmart……Page 362
Case 5.2 Massachusetts Stove Company—Bank Lending Decision……Page 363
Case 5.3 Fly-by-Night International Group: Can This CompanyBe Saved?……Page 370
Chapter Overview……Page 380
High Quality Reflects Economic Reality……Page 381
High Quality Leads to the Ability to Assess EarningsPersistence over Time……Page 384
Earnings Quality versus Balance Sheet Quality……Page 385
Earnings Management……Page 386
Deterrents to Earnings Management……Page 387
Obligations with Fixed Payment Dates and Amounts……Page 388
Obligations with Estimated Payment Dates and Amounts……Page 390
Obligations Arising from Advances from Customers……Page 391
Obligations under Mutually Unexecuted Contracts……Page 392
Contingent Obligations……Page 393
Off-Balance-Sheet Financing Arrangements……Page 394
Asset Recognition and Measurement……Page 397
Noncurrent Assets……Page 398
Gains and Losses from Peripheral Activities……Page 401
Restructuring Charges and Impairment Losses……Page 402
Discontinued Operations……Page 404
Other Comprehensive Income Items……Page 405
Changes in Accounting Principles……Page 406
Accounting Classification Differences……Page 408
Partitioning Earnings into Operating Cash Flow and Accrual Components……Page 410
A Model to Detect the Likelihood of Fraud……Page 417
Financial Reporting Worldwide……Page 423
Questions and Exercises……Page 424
Problems and Cases……Page 427
Integrative Case 6.1 Walmart……Page 439
Case 6.2 Citi: A Very Bad Year……Page 440
Case 6.3 Arbortech: Apocalypse Now……Page 449
Chapter Overview……Page 458
Investments by Shareholders: Common EquityIssuance……Page 459
Distributions to Shareholders: Dividends……Page 462
Equity Issued as Compensation: Stock Options……Page 466
Alternative Share-Based Compensation: RestrictedStock and RSUs……Page 470
Alternative Share-Based Compensation: Cash-SettledShare-Based Plans……Page 472
Net Income and Retained Earnings……Page 473
Summary and Interpretation of Equity……Page 476
Financing with Long-Term Debt……Page 477
Financial Reporting of Long-Term Debt……Page 480
Fair Value Disclosure and the Fair Value Option……Page 481
Accounting for Troubled Debt……Page 483
Hybrid Securities……Page 484
Transfers of Receivables……Page 488
Leases……Page 489
Capital Lease Method……Page 490
Choosing the Accounting Method……Page 491
The New Lease Standard……Page 497
The Use of Derivatives to Hedge Interest Rate Risk……Page 499
Nature and Use of Derivative Instruments……Page 500
Accounting for Derivatives……Page 501
Starbucks’ Derivatives Disclosures……Page 503
Summary……Page 504
Questions and Exercises……Page 505
Problems and Cases……Page 510
Case 7.2 Oracle Corporation: Share-Based Compensation Effects/Statement of Shareholders’ Equity……Page 516
Case 7.3 Long-Term Solvency Risk: Southwest and Lufthansa Airlines……Page 520
Chapter Overview……Page 528
Assets or Expenses?……Page 529
How Do Managers Allocate AcquisitionCosts over Time?……Page 536
Useful Life for Long-Lived Tangible and Limited-LifeIntangible Assets……Page 537
Cost Allocation (Depreciation/Amortization/Depletion) Method……Page 538
When Will the Long-Lived Assets Be Replaced?……Page 540
What Is the Relation between the Book Values and Market Values of Long-Lived Assets?……Page 541
Impairment of Long-Lived Assets Subject toDepreciation and Amortization……Page 542
Impairment of Goodwill……Page 544
IFRS Treatment of Upward Asset Revaluations……Page 548
Summary……Page 549
Minority, Passive Investments……Page 550
Minority, Active Investments……Page 557
Majority, Active Investments……Page 560
Preparing Consolidated Statements at the Date of Acquisition……Page 566
Consolidated Financial Statements Subsequent to Date of Acquisition……Page 568
What Are Noncontrolling Interests?……Page 571
Corporate Acquisitions and Income Taxes……Page 575
Consolidation of Unconsolidated Affiliates and Joint Ventures……Page 576
When Is an Entity Classified as a VIE?……Page 577
Foreign Currency Translation……Page 580
Translation Methodology—Foreign Currency IsFunctional Currency……Page 581
Translation Methodology—U.S. Dollar Is Functional Currency……Page 583
Interpreting the Effects of Exchange Rate Changes on Operating Results……Page 585
Questions and Exercises……Page 586
Problems and Cases……Page 588
Integrative Case 8.1 Walmart……Page 603
Case 8.2 Disney Acquisition of Marvel Entertainment……Page 604
Chapter Overview……Page 608
The Revenue Recognition Problem……Page 609
The IASB and FASB’s Revenue Recognition Project……Page 612
Application of the New Revenue RecognitionMethod……Page 614
Criteria for Expense Recognition……Page 623
Cost of Sales……Page 624
SG&A Costs……Page 630
Income Taxes……Page 632
Required Income Tax Disclosures……Page 633
Pensions and Other PostretirementBenefits……Page 640
The Economics of Pension Accounting in a DefinedBenefit Plan……Page 641
Reporting the Income Effects in Net Income andOther Comprehensive Income……Page 644
Pension Expense Calculation with Balance Sheet andNote Disclosures……Page 645
Income Statement Effects……Page 646
Impact of Actuarial Assumptions……Page 649
Signals about Earnings Persistence……Page 650
Questions and Exercises……Page 651
Problems and Cases……Page 654
Integrative Case 9.1 Walmart……Page 663
Case 9.2 Coca-Cola Pensions……Page 664
Chapter Overview……Page 666
Introduction to Forecasting……Page 667
General Forecasting Principles……Page 668
Seven-Step Forecasting Game Plan……Page 669
Coaching Tips for Implementing the Seven-Step Forecasting Game Plan……Page 671
Step 1: Project Revenues……Page 673
Projecting Revenues for Starbucks……Page 674
Step 2: Project Operating Expenses……Page 685
Projecting Cost of Sales Including Occupancy Costs……Page 686
Projecting Store Operating Expenses and Other Operating Expenses……Page 687
Projecting Property, Plant, and Equipment and Depreciation Expense……Page 688
Techniques to Project Operating Assetsand Liabilities……Page 693
Projecting Cash and Cash Equivalents……Page 697
Projecting Accounts Receivable……Page 702
Projecting Current and Noncurrent Deferred Income Tax Assets……Page 703
Projecting Property, Plant, and Equipment and Accumulated Depreciation……Page 704
Projecting Assets as a Percentage of Total Assets……Page 705
Projecting Accounts Payable……Page 706
Projecting Stored-Value Card Liabilities……Page 707
Projecting Financial Assets……Page 708
Projecting Short-Term and Long-Term Debt……Page 709
Projected Total Liabilities……Page 710
Projecting Interest Expense……Page 711
Projecting Noncontrolling Interests……Page 712
Projecting Common Stock, Preferred Stock, and Additional Paid-in Capital……Page 713
Step 5: Project Provisions for Taxes, Net Income, Dividends, Share Repurchases, and Retained Earnings……Page 714
Net Income Attributable to Starbucks’ Comm onShareholders……Page 715
Projecting Dividends and Share Repurchases……Page 716
Retained Earnings……Page 717
Balancing Starbucks’ Balance Sheets……Page 718
Step 7: Project the Statement of CashFlows……Page 720
Specific Steps for Forecasting Implied Statements of Cash Flows……Page 721
Projected Total Assets Approach……Page 726
Test Forecast Validity by Analyzing Projected Financial Statements……Page 727
Reactions to Announcements……Page 730
Summary……Page 731
Questions and Exercises……Page 732
Problems and Cases……Page 733
Integrative Case 10.1 Walmart……Page 739
Case 10.2 Massachusetts Stove Company: AnalyzingStrategic Options……Page 746
Chapter Overview……Page 756
The General Valuation Model……Page 757
Equivalence among Dividends, Cash Flows, and Earnings Valuation……Page 759
Expected Rates of Return……Page 760
Cost of Common Equity Capital……Page 761
Evaluating the Use of the CAPM to Measure the Cost of Equity Capital……Page 767
Cost of Debt Capital……Page 768
Cost of Equity Capital Attributable to Noncontrolling Interests……Page 769
Computing the Weighted-Average Cost of Capital……Page 770
Dividends-Based Valuation Concepts……Page 774
Measuring Dividends……Page 778
Measuring Dividends for Starbucks……Page 779
Selecting a Forecast Horizon……Page 780
Projecting and Valuing Continuing Dividends……Page 781
The Dividends-Based Valuation Model……Page 786
Using the Dividends-Based Valuation Model to Value Starbucks……Page 787
Sensitivity Analysis and InvestmentDecision Making……Page 791
Summary……Page 793
Questions and Exercises……Page 794
Problems and Cases……Page 795
Integrative Case 11.1 Walmart……Page 799
Chapter Overview……Page 802
Rationale for Cash-Flow-Based Valuation……Page 804
A Conceptual Framework for Free Cash Flows……Page 805
How Do We Measure Free Cash Flows?……Page 807
Valuation Models for Free Cash Flows for CommonEquity Shareholders……Page 816
Free Cash Flows Valuation of Starbucks……Page 818
Starbucks Discount Rates……Page 819
Valuing Starbucks Using Free Cash Flows……Page 820
Valuing Starbucks Using Free Cash Flows to CommonEquity……Page 821
Valuing Starbucks Using Free Cash Flows to All Debtand Equity Capital Stakeholders……Page 825
Necessary Adjustments to Compute Common EquityShare Value……Page 826
Sensitivity Analysis and InvestmentDecision Making……Page 829
Questions and Exercises……Page 831
Problems and Cases……Page 832
Integrative Case 12.1 Walmart: Free-Cash-Flows Valuation ofWalmart’s Common Equity……Page 842
Case 12.2 Holmes Corporation……Page 847
Chapter Overview……Page 860
Rationale for Earnings-Based Valuation……Page 862
Earnings-Based Valuation: PracticalAdvantages and Concerns……Page 864
Theoretical and Conceptual Foundationsfor Residual Income Valuation……Page 866
Intuition for Residual Income Measurementand Valuation……Page 868
Illustrations of Residual Income Measurementand Valuation……Page 869
Residual Income Valuation with FiniteHorizon Earnings Forecasts andContinuing Value Computations……Page 873
Valuation of Starbucks Using theResidual Income Model……Page 875
Residual Income ModelImplementation Issues……Page 881
Dirty Surplus Accounting……Page 882
Common Stock Transactions……Page 883
Negative Book Value of CommonShareholders’ Equity……Page 884
Consistency in Residual Income,Dividends, and Free Cash FlowsValuation Estimates……Page 885
Questions and Exercises……Page 886
Problems and Cases……Page 888
Integrative Case 13.1 Walmart……Page 893
Chapter Overview……Page 896
Market Multiples of Accounting Numbers……Page 898
A Model of the Value-to-Book Ratio……Page 900
The Value-to-Book Model with Finite HorizonEarnings Forecasts and Continuing Value……Page 903
Why Might VB Ratios and MB Ratios Differ from 1?……Page 905
Application of the Value-to-Book Model to Starbucks……Page 906
Empirical Data on MB Ratios……Page 909
Empirical Research Results on thePredictive Power of MB Ratios……Page 911
Price-Earnings and Value-Earnings Ratios……Page 912
A Model for the Value-Earnings Ratio with Application to Starbucks……Page 913
PE Ratios from a Theoretical Perspective: Projecting Firm Value from Permanent Earnings……Page 914
Price-Earnings Ratios from a Practical Perspective……Page 915
Benchmarking Relative Valuation: Using MarketMultiples of Comparable Firms……Page 917
Incorporating Earnings Growth into PE Ratios……Page 921
Empirical Properties of PE Ratios……Page 924
Reverse Engineering……Page 926
Reverse Engineering Starbucks’s Stock Price……Page 927
What Does ‘‘Capital Market Efficiency’’ Really Mean?……Page 929
Striking Evidence on the Degree of Market Efficiencyand Inefficiency with Respect to Earnings……Page 930
Striking Evidence on the Use of Valuation Models toForm Portfolios……Page 932
Summary……Page 934
Questions and Exercises……Page 935
Problems and Cases……Page 936
Integrative Case 14.1 Walmart……Page 941
Appendix A: Financial Statements and Notes for Starbucks Corporation……Page 944
Appendix B: Management’s Discussion and Analysis for Starbucks Corporation……Page 988
Appendix C: Financial Statement Analysis Package (FSAP)……Page 990
Appendix D: Financial Statement Ratios: Descriptive Statistics by Industry……Page 1034
Index……Page 1036

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