Financial Statement Analysis: A Global Perspective.
THOMAS R. ROBINSON, PAUL MUNTER, and JULIA GRANT, Financial Statement Analysis: A Global Perspective (Upper Saddle River, NJ: Pearson Education, Inc., 2004, pp. xxiii, 793).
As its title suggests, this book deals with the analysis of financial statements issued by international companies. In so doing, the authors are concerned with both IAS (currently referred to as International Financial Reporting Standards [IFRS]) and FASB accounting standards. The book is primarily addressed to upper-level undergraduates and graduate students in a one-semester financial statement analysis course offered in accounting or finance. The authors assert that students need no accounting background to use this book, which does not cover debits and credits. The text focuses on two companies, Motorola (using FASB Standards) and Nokia (using IAS). Most chapters end with CFA problems and cases that include examples of financial reporting by such companies as AMR, AOL TimeWarner, Dell, Quest, Starbucks, SBC, UAL, Vivendi, Winnebago, and WorldCom.
In the first part of the book, four chapters cover the fundamentals of financial accounting and reporting. The six chapters in the second part deal with techniques of financial statement analysis and valuation, including industry-specific approaches. The third part of the book contains eight chapters furnishing details on analysis of such topics as: inventories, long-term investments, leases, special purpose entities, income taxes, employee stock options, pensions and other benefit plans, and derivatives--as well as the effects of multinational operations on financial reports (e.g., foreign currency translation) and techniques for analyzing segments of the firm and overall performance (e.g., residual income).
This book supports a companion website, PowerPoint[R] slides, and a test-item file. Comprehensive in its coverage, the book is intended to be used flexibly by accounting or finance majors and general M.B.A. students. The idea of providing an introduction to financial accounting before discussing financial statement analysis is desirable, as is deferring the more profound aspects of accounting to chapters in the third part of the book. A mix of short and long problems as well as cases, drawing upon current financial reports, is found at the end of the chapters.
The authors may be overly ambitious in covering financial accounting for neophytes--from introductory to advanced concepts--along with financial statement analysis, all in one text. Many undergraduate and graduate students would have considerable difficulty handling that combination in one course. Additionally, the cases deal only with financial statements per se, rather than companies as a whole--their management, strategies, production, and marketing, which, in turn, affect their accounting.
To truly live up to its global title, the book should contain case material on financial reporting systems in several countries. Finally, the authors could better emphasize cultural differences among countries, which affect their accounting and interpretations of financial reports. Nevertheless, the book is worth careful consideration for adoption in a financial statement analysis course.
Professor of Accounting
John Carroll University
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Book Reviews|
|Publication:||Issues in Accounting Education|
|Article Type:||Book Review|
|Date:||May 1, 2004|
|Previous Article:||Financial Statement Analysis.|
|Next Article:||Editor's report January 1, 2001 through December 31, 2003*.|