Financial Reporting and Analysis: Using Financial Accounting Information (13th Edition)

Book Preface

This book teaches financial accounting from both the user’s and the preparer’s perspectives. It includes the language and the preparation of financial statements. Reliance is placed on actual annual reports, 10-Ks, and proxy statements. Sufficient background material is included, facilitating its use for students who do not have prior courses in accounting or finance.

Tell me, I’ll forget.
Show me, I may remember.
Involve me, I’ll understand.

This proverb describes the approach of this book—involving students in actual financial statements and their analysis and interpretation. Its premise is that students are better prepared to understand and analyze real financial reports when learning is not based on oversimplified financial statements.

From this basic premise come the many changes to this edition. Those changes, supported by our technology tools, focus on the goal of this text, which is to involve students in actively learning how to read, understand, and analyze the financial statements of actual companies. These changes are discussed in this preface.

Significant Items

The following notable items are available in this edition to increase its relevance to students and its flexibility for instructors:

1. Coverage of ethics has been expanded.
2. International accounting has been updated to reflect the substantial changes that have taken place. This includes model financial statements.
3. Internet exercises have been updated and new exercises added.
4. Questions have been updated and new questions added.
5. Problems have been updated and new problems added.
6. Where appropriate, cases have been updated and new cases added. This includes more than 70 revised and new cases.
7. Exhibits and cases are extensively based on real companies to which students would relate.

Content

Preface xix
Chapter 1 Introduction to Financial Reporting 1
Chapter 2 Introduction to Financial Statements and Other
Financial Reporting Topics 54
Chapter 3 Balance Sheet 95
Chapter 4 Income Statement 157
Chapter 5 Basics of Analysis 199
Chapter 6 Liquidity of Short-Term Assets; Related Debt-Paying Ability 223
Chapter 7 Long-Term Debt-Paying Ability 278
Chapter 8 Profitability 323
Chapter 9 For the Investor 365
Chapter 10 Statement of Cash Flows 393 Summary Analysis Nike, Inc. (Includes 2011
Financial Statements of Form 10-K) 438
Chapter 11 Expanded Analysis 482
Chapter 12 Special Industries: Banks, Utilities, Oil and Gas,Transportation, Insurance, and Real Estate Companies 540
Chapter 13 Personal Financial Statements and Accounting for Governments and Not-for-Profit Organizations 588
Appendix Thomson ONE Basics and Tutorial 615
Glossary 621
Bibliography 641
Index 653