Higher Education

Financial Reporting, Financial Statement Analysis and Valuation, 8th Edition

  • James M. Wahlen Indiana University
  • Stephen P. Baginski University of Georgia
  • Mark Bradshaw Boston College
  • ISBN-10: 1285190904  |  ISBN-13: 9781285190907
  • 1200 Pages
  • Previous Editions: 2011, 2007, 2004
  • © 2015 | Published
  • College Bookstore Wholesale Price = $227.25
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About

Overview

Wahlen/Baginski/Bradshaw FINANCIAL REPORTING, FINANCIAL STATEMENT ANALYSIS, AND VALUATION, 8E is a balanced, flexible, and complete book written with the premise that students learn financial statement analysis most effectively by performing the analysis on real-world companies. Students learn to integrate the concepts from economics, finance, business strategy, accounting, and other business disciplines through the integration of a unique six-step process. New to this edition, chapters now include quick checks after each section so that students can be sure that they have obtained the key insights after reading each section.

Features and Benefits

  • The chapters now include quick checks after each section so that students can be sure that they have obtained the key insights after reading each section. In addition, each section and each of the end-of-chapter questions, exercises, problems, and cases is cross-referenced to learning objectives so that students can implement the critical skills and techniques associated with each of the learning objectives.
  • Six-Step Analysis Process: The book is structured using a comprehensive and logical six-step fundamental analysis process to evaluate financial statements and value firms. The six steps include economic analysis of the industry, strategic analysis of the firm, accounting quality analysis, profitability and risk ratio analysis, forecasting, and valuation. This framework provides a sensible and intuitive approach for you and your students.
  • Balanced Approach: The text continues to offer a balanced and thorough treatment of the three main elements of financial statement analysis: analysis of firms' strategies (profitability and risk analysis with ratios), accounting quality analysis, and forecasting and valuation.
  • Financial Statement Analysis Package (FSAP): Faculty and students who use the text also are entitled to use FSAP, which is an extensive Excel-based analysis package. FSAP provides you and your students with a powerful template package for ratios analysis, financial statement forecasting, valuation, and sensitivity analysis. You will find FSAP to be a useful tool for preparing cases and analyzing companies. Students find FSAP to be a useful tool for analyzing and valuing companies using the methods of the text.
  • Real-World Companies Used Throughout: Numerous examples in the text--approximately ten per chapter--are based on the financial information of real-world public companies. Each chapter uses PepsiCo's 2008 financial statements as a continuing case to illustrate the techniques of the chapter. The end-of-chapter materials for each chapter also contain an integrative case involving Starbucks so that you can assign a continuing, integrative case for students to apply their learning. Students will recognize other examples of real-world companies used throughout the text, including Wal-Mart, Coca-Cola, Enron, Sun Microsystems, Amazon, Nokia, Microsoft, and General Electric.
  • Accounting Quality: The chapters on accounting quality are structured to provide broader and deeper coverage of accounting for financing, investing, and operating activities. The organization provides a logical flow, beginning in Chapter 6 with a discussion of the determinants of accounting quality, how to evaluate accounting quality, and how to adjust reported earnings and financial statements to cleanse low-quality accounting items. The discussion proceeds across the primary business activities of firms in the natural sequence in which the activities occur--raising financial capital, investing that capital in productive assets, and operating the business. Chapter 7 discusses accounting for financing activities. Chapter 8 describes accounting for investing activities, and Chapter 9 deals with accounting for operating activities.
  • Current IFRS and Codification Coverage: The text includes references to GAAP and IFRS as well as to the new Codification format so that students have the most relevant information.
  • The chapters provide a number of relevant insights from empirical accounting research that are pertinent to financial statement analysis and valuation.

Table of Contents

1. Overview of Financial Reporting, Financial Statement Analysis, and Valuation.
2. Asset and Liability Valuation and Income Recognition.
3. Income Flows versus Cash Flows: Understanding the Statement of Cash Flows.
4. Profitability Analysis.
5. Risk Analysis.
6. Financing Activities.
7. Investing Activities.
8. Operating Activities.
9. Accounting Quality.
10. Forecasting Financial Statements.
11. Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach.
12. Valuation: Cash-Flow Based Approaches.
13. Valuation: Earnings-Based Approaches.
14. Valuation: Market-Based Approaches.
Appendix A: Financial Statements and Notes for PepsiCo, Inc. and Subsidiaries.
Appendix B (online): Management's Discussion and Analysis for PepsiCo, Inc. and Subsidiaries.
Appendix C (online): Financial Statement Analysis Package (FSAP).
Appendix D (online): Financial Statement Ratios: Descriptive Statistics by Industry and by Year.
Index.

What's New

  • The exposition of each chapter has been streamlined. Known for being a well-written, accessible text, this edition presents each chapter in more concise, direct discussion so that you can cover the key insights quickly and efficiently.
  • The chapters now include quick checks after each section so that students can be sure that they have obtained the key insights after reading each section. In addition, each section and each of the end-of-chapter questions, exercises, problems, and cases is cross-referenced to learning objectives so that students can implement the critical skills and techniques associated with each of the learning objectives.
  • To augment income statement quality, the chapters on accounting quality have been expanded to provide more in-depth analysis of balance sheet quality.
  • Each chapter includes relevant, new discussion of current U.S. GAAP and IFRS and explains how U.S. GAAP compares with IFRS and how to deal with such differences in financial statement analysis. End-of-chapter materials contain many problems and cases involving non-U.S. companies, with application of financial statement analysis techniques to IFRS-based financial statements.
  • The chapters provide a number of relevant insights from empirical accounting research that are pertinent to financial statement analysis and valuation.
  • Each chapter contains new or substantially revised and updated end-of-chapter materials, including new problems and cases. This material is relevant, real-world, and written for maximum learning value.
  • The Financial Statement Analysis Package (FSAP) available with this book has been substantially revised and made more user-friendly.

Supplements

All supplements have been updated in coordination with the main title. Select the main title's "About" tab, then select "What's New" for updates specific to title's edition.

For more information about these supplements, or to obtain them, contact your Learning Consultant.

Instructor Supplements

Website  (ISBN-10: 1285190947 | ISBN-13: 9781285190945)

Financial Analysis Software (Web Only)  (ISBN-10: 1285190955 | ISBN-13: 9781285190952)

Faculty and students who use the text are also entitled to use FSAP, which is an extensive Excel-based analysis package. FSAP gives you and your students a powerful template package for ratios analysis, financial statement forecasting, valuation, and sensitivity analysis. Students find FSAP to be a useful tool for analyzing and valuing companies using the methods of the text.

Meet the Author

Author Bio

James M. Wahlen

Dr. James M. Wahlen is the James R. Hodge Chair, Professor of Accounting, and the Chairman of the Accounting Department at the Kelley School of Business at Indiana University. He received his Ph.D. from the University of Michigan and has served on the faculties of the University of Chicago, the University of North Carolina at Chapel Hill, INSEAD, the University of Washington, and Pacific Lutheran University. Dr. Wahlen’s teaching and research interests focus on financial accounting, financial statement analysis, and the capital markets. His research investigates earnings quality and earnings management, earnings volatility as an indicator of risk, fair value accounting for financial instruments, accounting for loss reserve estimates by banks and insurers, stock market efficiency with respect to accounting information, and testing the extent to which future stock returns can be predicted with earnings and other financial statement information. His research has been published in a wide array of academic and practitioner journals in accounting and finance. Dr. Wahlen has public accounting experience in both Milwaukee and Seattle and is a member of the American Accounting Association. He has received numerous teaching and research awards during his career. Dr. Wahlen is also a co-author of FINANCIAL REPORTING, FINANCIAL STATEMENT ANALYSIS, AND VALUATION: A STRATEGIC PERSPECTIVE, 8E. In his free time, he loves outdoor sports (biking, hiking, skiing, golf), cooking (and, of course, eating), and listening to rock music (especially if it is loud and live).

Stephen P. Baginski

Stephen P. Baginski is the Herbert E. Miller Chair in Financial Accounting at the University of Georgia's J.M. Tull School of Accounting. He received his Ph.D. from the University of Illinois in 1986, and he has taught a variety of financial and managerial undergraduate, MBA, and executive education courses at Indiana University, Illinois State University, the University of Illinois, Northeastern University, Florida State University, Washington University in St. Louis, the University of St. Galen, the Swiss Banking Institute at the University of Zurich, and INSEAD. Professor Baginski has published articles in a variety of journals including The Accounting Review, Journal of Accounting Research, Contemporary Accounting Research, The Journal of Risk and Insurance, Quarterly Review of Finance and Economics, and Review of Quantitative Finance and Accounting. His research primarily deals with the causes and consequences of voluntary management disclosures of earnings forecasts, and he also investigates the usefulness of financial accounting information in security pricing and risk assessment. Professor Baginski has served on several editorial boards and as an associate editor at Accounting Horizons and The Review of Quantitative Finance and Accounting. He has won numerous undergraduate and graduate teaching awards at the department, college, and university level during his career, including receipt of the Doctoral Student Inspiration Award from students at Indiana University. Professor Baginski loves to watch college football, play golf, and run (very slowly) in his spare time.

Mark Bradshaw

Mark T. Bradshaw is an Associate Professor of Accounting at the Carroll School of Management of Boston College. Dr. Bradshaw received a Ph.D. from the University of Michigan Business School, and earned a BBA summa cum laude with highest honors in accounting and master's degree in financial accounting from the University of Georgia. He previously taught at University of Chicago, Harvard Business School, and University of Georgia. He has been a Certified Public Accountant since 1991 and was an auditor for Arthur Andersen & Co. in Atlanta. Bradshaw conducts research on capital markets, specializing in the examination of securities analysts and related financial reporting issues. His research has been published in a variety of academic and practitioner journals, and he currently serves as Associate Editor for both Journal of Accounting and Economics and Journal of Accounting Research, is on the Editorial Board of The Accounting Review, and is a reviewer for numerous accounting and finance journals. He has also authored a book with Brian Bruce, Analysts, Lies, and Statistics – Cutting through the Hype in Corporate Earnings Announcements. Approximately twenty pounds ago, Bradshaw was an accomplished cyclist. Currently focused on other pursuits (including the co-administration of the lives of two toddlers), he still routinely passes younger and thinner cyclists.