"Financial Statement Analysis: A Practitioner's Guide is a well-organized, thorough exploration of the challenges facing practitioners who rely on financial statements to make investment and lending decisions. Reference books about accounting, while valuable for their insights, are seldom this enjoyable to read. This book is different because the authors seamlessly integrate fascinating real-life examples and instructive fictional scenarios into each chapter to illustrate their points. For anyone with a passing interest in the subject, or for new analysts learning the trade, Financial Statement Analysis is an amazing resource."
—Christopher Shayne, CFA, Director of Product Operations for Enterprise Risk Solutions at Moody's Analytics
"Any book that reaches its 4th edition (updated to 2011) should be good. That's true in spades for Financial Statement Analysis. Fridson and Alvarez have written a classic. It should be required reading and a constant reference source on the bookshelf of any investor intending to buy individual company stocks or bonds."
—Canadian Financial DIY blog
"In the 1990s, Benjamin Graham's Security Analysis served as [Value Partners’] reference book, but since then they have been using Martin Fridson's Financial Statement Analysis: A Practioner's Guide."
—excerpt from The Value Investors: Lessons from the World's Top Fund Managers by Ronald Chan, Bruce C. N. Greenwald (Foreword)
Strongly recommended if you are an independent investor who wants to understand financial statements better yet does not want to train to become an accountant. Some of the insights are numerical - for example the common form balance sheet (where you convert each asset into a percentage of totals and each liability into a percentage of liabilities) was an eyeopener to me even if it may be common knowledge to others. Others of them are about the financial statement as managerial art form - I note that the issue of when software sales should be considered as an asset has yet again hit the headlines as a source of dispute. See the book's section on Aggressive revenue recognition.
Not only is this a masterful exposition it is an enjoyable read. There is a general charming and pleasant tone for example (end Chapter 7): "misleading reporting of expenses can often be detected by careful scrutiny of financial statements. To benefit from such insights analysts must be disciplined enough to disbelieve the innocent explanations that companies routinely provide for ratios that in reality reveal trouble down the road." You have been warned!
If you know nothing about financial statements, this should not be a book of your choice - it expect you to know basic meaning of financial statement figures. But it helps you to see reality behind the statement and the intentions of its issuer. Armed with knowledge and many real-world examples this book provides, you won't be fooled by clever accounting tricks managers employ to boost their compensations and achieve cheep capital for their companies. Must-read of every value investor.
I use this book in my lectures Fundamental Analysis and Valuation for postgraduate students. It is very good supplement to the traditional valuation literature. Not only does it provide a healthy dose of theory in a readable format, but it also offers an abundance of examples. As such the book fully deserves its subtitle. A recommended read for anyone interested in financial statements and finance.
Fridson and Alvarez have written a thorough, practical, insightful, relevant and accessible book on financial statement analysis. The motivations, manipulations, costs and benefits related to how we quantify and memorialize business activity are concisely rendered herein, and complemented with a workbook (also available at Amazon). I was first exposed to this book at Columbia Business School in the modern incarnation of the Graham and Dodd course on Security Analysis. Simply put, Financial Statement Analysis is a must read for serious students and practitioners of finance alike. Buy this book, it's the best!
This is a great book that gets you beyond the academic approach to financial statements. After orienting you on the premise that obtaining cheap capital is the purpose of financial reporting, the book successfully supports that conclusion.
I learnt more in this one book by the authors at a fraction of the cost than my Investment class as a senior at University...It remains a solid source of reference with respect to the work I do today...I highly recommend it both to seasoned investment professionals and as a training manual for young bankers engaged in today's very sophisticated credit capital markets...You will not be disappointed...
Product Details :
Hardcover: 378 pages
Publisher: Wiley; 4 edition (July 5, 2011)
Language: English
ISBN-10: 0470635606
ISBN-13: 978-0470635605
Product Dimensions: 6.5 x 1.3 x 9.4 inches
More Details about Financial Statement Analysis: A Practitioner's Guide, 4th edition
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