,Contents
Cover
Endorsement
Series
Title Page
Copyright
Dedication
Preface to Fourth Edition
Acknowledgments
Part One: Reading between the Lines
Chapter 1: The Adversarial Nature of Financial Reporting
THE PURPOSE OF FINANCIAL REPORTING
THE FLAWS IN THE REASONING
SMALL PROFITS AND BIG BATHS
MAXIMIZING GROWTH EXPECTATIONS
DOWNPLAYING CONTINGENCIES
THE IMPORTANCE OF BEING SKEPTICAL
CONCLUSION
Part Two: The Basic Financial Statements
Chapter 2: The Balance Sheet
THE VALUE PROBLEM
COMPARABILITY PROBLEMS IN THE VALUATION OF FINANCIAL ASSETS
INSTANTANEOUS WIPEOUT OF VALUE
HOW GOOD IS GOODWILL?
,LOSING VALUE THE OLD-FASHIONED WAY
TRUE EQUITY IS ELUSIVE
PROS AND CONS OF A MARKET-BASED EQUITY FIGURE
THE COMMON FORM BALANCE SHEET
CONCLUSION
Chapter 3: The Income Statement
MAKING THE NUMBERS TALK
HOW REAL ARE THE NUMBERS?
CONCLUSION
Chapter 4: The Statement of Cash Flows
THE CASH FLOW STATEMENT AND THE LEVERAGED BUYOUT
ANALYTICAL APPLICATIONS
CASH FLOW AND THE COMPANY LIFE CYCLE
THE CONCEPT OF FINANCIAL FLEXIBILITY
IN DEFENSE OF SLACK
CONCLUSION
Part Three: A Closer Look at Profits
Chapter 5: What Is Profit?
BONA FIDE PROFITS VERSUS ACCOUNTING PROFITS
WHAT IS REVENUE?
WHICH COSTS COUNT?
HOW FAR CAN THE CONCEPT BE STRETCHED?
CONCLUSION
Chapter 6: Revenue Recognition
, CHANNEL-STUFFING IN THE DRUG BUSINESS
A SECOND TAKE ON EARNINGS
ASTRAY ON LAYAWAY
RECOGNIZING MEMBERSHIP FEES
A POTPOURRI OF LIBERAL REVENUE RECOGNITION TECHNIQUES
FATTENING EARNINGS WITH EMPTY CALORIES
TARDY DISCLOSURE AT HALLIBURTON
MANAGING EARNINGS WITH RAINY DAY RESERVES
FUDGING THE NUMBERS: A SYSTEMATIC PROBLEM
CONCLUSION
Chapter 7: Expense Recognition
NORTEL'S DEFERRED PROFIT PLAN
GRASPING FOR EARNINGS AT GENERAL MOTORS
TIME-SHIFTING AT FREDDIE MAC
CONCLUSION
Chapter 8: The Applications and Limitations of EBITDA
EBIT, EBITDA, AND TOTAL ENTERPRISE VALUE
THE ROLE OF EBITDA IN CREDIT ANALYSIS
ABUSING EBITDA
A MORE COMPREHENSIVE CASH FLOW MEASURE
WORKING CAPITAL ADDS PUNCH TO CASH FLOW ANALYSIS
CONCLUSION
Chapter 9: The Reliability of Disclosure and Audits
AN ARTFUL DEAL
Cover
Endorsement
Series
Title Page
Copyright
Dedication
Preface to Fourth Edition
Acknowledgments
Part One: Reading between the Lines
Chapter 1: The Adversarial Nature of Financial Reporting
THE PURPOSE OF FINANCIAL REPORTING
THE FLAWS IN THE REASONING
SMALL PROFITS AND BIG BATHS
MAXIMIZING GROWTH EXPECTATIONS
DOWNPLAYING CONTINGENCIES
THE IMPORTANCE OF BEING SKEPTICAL
CONCLUSION
Part Two: The Basic Financial Statements
Chapter 2: The Balance Sheet
THE VALUE PROBLEM
COMPARABILITY PROBLEMS IN THE VALUATION OF FINANCIAL ASSETS
INSTANTANEOUS WIPEOUT OF VALUE
HOW GOOD IS GOODWILL?
,LOSING VALUE THE OLD-FASHIONED WAY
TRUE EQUITY IS ELUSIVE
PROS AND CONS OF A MARKET-BASED EQUITY FIGURE
THE COMMON FORM BALANCE SHEET
CONCLUSION
Chapter 3: The Income Statement
MAKING THE NUMBERS TALK
HOW REAL ARE THE NUMBERS?
CONCLUSION
Chapter 4: The Statement of Cash Flows
THE CASH FLOW STATEMENT AND THE LEVERAGED BUYOUT
ANALYTICAL APPLICATIONS
CASH FLOW AND THE COMPANY LIFE CYCLE
THE CONCEPT OF FINANCIAL FLEXIBILITY
IN DEFENSE OF SLACK
CONCLUSION
Part Three: A Closer Look at Profits
Chapter 5: What Is Profit?
BONA FIDE PROFITS VERSUS ACCOUNTING PROFITS
WHAT IS REVENUE?
WHICH COSTS COUNT?
HOW FAR CAN THE CONCEPT BE STRETCHED?
CONCLUSION
Chapter 6: Revenue Recognition
, CHANNEL-STUFFING IN THE DRUG BUSINESS
A SECOND TAKE ON EARNINGS
ASTRAY ON LAYAWAY
RECOGNIZING MEMBERSHIP FEES
A POTPOURRI OF LIBERAL REVENUE RECOGNITION TECHNIQUES
FATTENING EARNINGS WITH EMPTY CALORIES
TARDY DISCLOSURE AT HALLIBURTON
MANAGING EARNINGS WITH RAINY DAY RESERVES
FUDGING THE NUMBERS: A SYSTEMATIC PROBLEM
CONCLUSION
Chapter 7: Expense Recognition
NORTEL'S DEFERRED PROFIT PLAN
GRASPING FOR EARNINGS AT GENERAL MOTORS
TIME-SHIFTING AT FREDDIE MAC
CONCLUSION
Chapter 8: The Applications and Limitations of EBITDA
EBIT, EBITDA, AND TOTAL ENTERPRISE VALUE
THE ROLE OF EBITDA IN CREDIT ANALYSIS
ABUSING EBITDA
A MORE COMPREHENSIVE CASH FLOW MEASURE
WORKING CAPITAL ADDS PUNCH TO CASH FLOW ANALYSIS
CONCLUSION
Chapter 9: The Reliability of Disclosure and Audits
AN ARTFUL DEAL
