Financial Statement Analysis.
JOHN J. WILD, K. R. SUBRAMANYAM, AND ROBERT R. HALSEY, Financial Statement Analysis, Eighth edition (Boston, MA: McGraw-Hill/Irwin, 2004, pp. xix, 673).
The text's preface claims that it "responds to the requests and demands of modern day analysts" (iii). The authors' accomplish this task by organizing the book effectively into three parts: "Analysis Overview"; "Accounting Analysis"; and "Financial Analysis." The text provides three Financial Statements, which they use for various examples and assignments: Eastman Kodak, Campbell Soup, and Quaker Oats. Campbell Soup also provides an excellent example of a comprehensive detailed case analysis.
The first part of the text provides an overview of what to expect by analyzing Eastman Kodak's financial statements. The second part summarizes significant accounting concepts, including good definitions of terms and review of ideas even for those with minimal exposure to accounting concepts. The authors' emphasize a useful cash flow structure to analysis and business operations. The third section provides a variety of tools for use in measuring earnings and valuing equity.
This edition contains a 20 percent reduction of pages from the prior one, which the authors claim does not significantly reduce its content. The understandable material contains many in-depth explanations, examples, charts, and "real-world" excerpts. Their "Analysis Viewpoints" technique provides situations based upon a critical reading to evaluate professional situations. End-of-chapter materials provide well-written detailed analyses to help readers improve their own thought processes. The authors also provide many user-friendly pedagogical tools, including a website, PowerPoint[R] slides, chapter outlines, solution manual and instructor's CD-ROM.
The text contains no glossary, and the detailed index helped locate definitions but seemed time consuming. For a book copyrighted in 2004, I was surprised to find in the same chapter that discussed SFAS No. 141, referring to the exposure draft by mentioning that the "FASB continues to deliberate the proposal" (268). These are small issues when considered in the context of a well-written text that contains a synthesis of significant theoretical issues in both the fields of accounting and finance.
The book is aimed at both undergraduate and graduate audiences. The authors' claim the book can also be used in an "upper-level" capstone course. While I have not used the book, it seems to contain many productive uses for innovative professors.
LEONARD E. STOKES
Professor of Accounting
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|Title Annotation:||Book Reviews|
|Author:||Stokes, Leonard E.|
|Publication:||Issues in Accounting Education|
|Article Type:||Book Review|
|Date:||May 1, 2004|
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