Business Analysis and Valuation Using Financial Statements, Text Only

by Palepu, Krishna G.; Healy, Paul M.; Bernard, Victor L

• ISBN13: 9780324202526
• ISBN10: 0324202520
• Edition: CD
• Format: Paperback
• Copyright: 2003-08-07
• Publisher: South-Western College Pub

Summary

Financial statements are the basis for a wide range of business analysis. Managers, securities analysts, bankers and consultants all use them to make business decisions. There is strong demand among business students for course materials that provide a framework for using financial statement data in a variety of business analysis and valuation contexts.

Author Biography

Vic Bernard was the Price Waterhouse Professor of Accounting and Director of the Paton Accounting Center at the University of Michigan and Director of Research for the American Accounting Association. Paul Healy is the James R. Williston Professor of Business Administration at the Harvard Business School and Co-Chair of the Doctoral Program. Krishna G. Palepu is the Ross Graham Walker Professor of Business Administration and Senior Associate Dean and Director of Research at the Harvard Business School.

Table of Contents

Part 1 FRAMEWORK
A Framework for Business Analysis and Valuation Using Financial Statements	1	(1)
The Role of Financial Reporting in Capital Markets	2	(1)
From Business Activities to Financial Statements	3	(3)
From Financial Statements to Business Analysis	6	(3)
Summary	9	(1)
Discussion Questions	9
Part 2 BUSINESS ANALYSIS AND VALUATION TOOLS
Strategy Analysis	1	(1)
Industry Analysis	1	(4)
Applying Industry Analysis: The Personal Computer Industry	5	(2)
Competitive Strategy Analysis	7	(4)
Corporate Strategy Analysis	11	(3)
Summary	14	(1)
Discussion Questions	15
Overview of Accounting Analysis	1	(1)
The Institutional Framework for Financial Reporting	1	(3)
Factors Influencing Accounting Quality	4	(2)
Steps in Doing Accounting Analysis	6	(5)
Accounting Analysis Pitfalls	11	(1)
Value of Accounting Data and Accounting Analysis	12	(1)
Summary	13	(1)
Discussion Questions	14
Implementing Accounting Analysis	1	(1)
Recasting Financial Statements	1	(4)
Asset Distortions	5	(2)
Overstated Assets	7	(5)
Understated Assets	12	(9)
Liability Distortions	21	(9)
Equity Distortions	30	(3)
Summary	33	(1)
Discussion Questions	34	(7)
Appendix: Recasting Financial Statements Into Standardized Templates	41
Financial Analysis	1	(1)
Ratio Analysis	1	(21)
Cash Flow Analysis	22	(5)
Summary	27	(1)
Discussion Questions	28	(2)
Appendix: Part A: Nordstrom, Inc. Financial Statements	30	(6)
Appendix: Part B: The TJX Companies, Inc. Financial Statements	36
Prospective Analysis: Forecasting	1	(1)
Relation of Forecasting to Other Analyses	1	(1)
The Techniques of Forecasting	1	(6)
Making Forecasts	7	(3)
Sensitivity Analysis	10	(2)
Summary	12	(1)
Discussion Questions	13	(2)
Appendix: The Behavior of Components of ROE	15
Prospective Analysis: Valuation Theory and Concepts	1	(1)
Defining Value for Shareholders	2	(1)
The Discounted Abnormal Earnings Valuation Method	3	(2)
Valuation Using Price Multiples	5	(5)
Shortcut Forms of Earnings-Based Valuation	10	(2)
The Discounted Cash Flow Model	12	(2)
Comparing Valuation Methods	14	(2)
Summary	16	(1)
Discussion Questions	17	(3)
Appendix: Reconciling the Discounted Dividends and Discounted Abnormal Earnings Models	20
Prospective Analysis: Valuation Implementation	1	(1)
Detailed Forecasts of Performance	1	(1)
Computing a Discount Rate	2	(5)
Terminal Values	7	(4)
Computing Estimated Values	11	(5)
Summary	16	(1)
Discussion Questions	16
Part 3 BUSINESS ANALYSIS AND VALUATION APPLICATIONS
Equity Security Analysis	1	(1)
Investor Objectives	1	(1)
Equity Security Analysis and Market Efficiency	2	(2)
Approaches to Fund Management and Securities Analysis	4	(2)
The Process of a Comprehensive Security Analysis	6	(4)
Performance of Security Analysts and Fund Managers	10	(2)
Summary	12	(1)
Discussion Questions	13
Credit Analysis and Distress Prediction	1	(1)
The Market for Credit	2	(1)
The Credit Analysis Process	3	(6)
Financial Statement Analysis and Public Debt	9	(4)
Prediction of Distress and Turnaround	13	(2)
Summary	15	(1)
Discussion Questions	15
Mergers and Acquisitions	1	(1)
Motivation for Merger or Acquisition	1	(4)
Acquisition Pricing	5	(5)
Acquisition Financing	10	(4)
Acquisition Outcome	14	(1)
Summary	15	(1)
Discussion Questions	16
Corporate Financing Policies	1	(1)
Factors That Determine Firms' Debt Policies	1	(1)
The Optimal Long-Term Mix of Debt and Equity	2	(5)
The Financing of New Projects	7	(2)
Factors That Determine Dividend Policies	9	(4)
Summary	13	(1)
Discussion Questions	14
Communication and Governance	1	(1)
Governance Overview	2	(2)
Management Communication with Investors	4	(2)
Communication Through Financial Reporting	6	(3)
Other Forms of Communicating with Investors	9	(3)
Auditor Analysis	12	(5)
Audit Committee Reviews	17	(1)
Summary	18	(1)
Discussion Questions	19
Index	1	(12)
Author Index	13