1Preface
785.7 Exercise
21 Meaning and Concept of Financial Analysis
796 Cash Flows and The Time Value of Money
31.1 Financial Analysis : 1.1.1 Objective
806.1 The Time Value of Money: 6.1.1 Discounting, Compounding, and Equivalence
41.2 FINANCIAL STATEMENTS USED IN FINANCIAL ANALYSIS
816.2 Components of Analysis
51.2.1 Income Statement
826.2.1 Net Investment
61.2.2 Balance Sheet
836.2.2 Net Operating Cash Inflows
71.3 Ratio Analysis
846.2.3 Economic Life
81.3.1 Liquidity Ratios
856.2.4 Terminal (Residual) Value
91.3.2 Activity Ratios
866.3 Methods of Analysis
101.3.3 Leverage Ratios
876.3.1 Simple Measures
111.3.4 Profitability Ratios
886.3.2 Economic Investment Measures
121.3.5 Companies’ Balance Sheets are distorted by Inflation
896.4 Applying Time-Adjusted Measures
131.4 Exercise
906.5 Exercise
142 Financial Analysis Process
917 Analysis of Investment Decisions
152.1 The Objectives of the Financial Analysis Process
927.1 Strategic Perspective
162.2 Distinguishing between Computations and Analysis : 2.2.1 Case Study 1.1
937.2 Decisional Framework
172.3 Exercise
947.2.1 Problem Definition
183 Analytical Tools and Techniques
957.2.2 Nature of the Investment
193.1 Introduction: 3.1.1 Case Study 3.1
967.2.3 Future Costs and Benefits
203.2 Ratios
977.2.4 Incremental Cash Flows
213.2.1 The Universe of Ratios
987.2.5 Relevant Accounting Data
223.2.2 Case Study 3.2
997.2.6 Sunk Costs
233.2.3 Value, Purposes, and Limitations of Ratio Analysis
1007.3 Refinements of Investment Analysis
243.2.4 Sources of Ratios
1017.3.1 A Machine Replacement
253.3 Common-Size Analysis
1027.3.2 Net Investment Refined
263.3.1 Common-Size Analysis of the Balance Sheet
1037.3.3 Operating Cash Inflows Refined
273.3.2 Common-Size Analysis of the Income Statement
1047.3.4 Unequal Economic Lives
283.3.3 Cross-Sectional Analysis
1057.3.6 Analytical Framework
293.3.4 Trend Analysis
1067.3.7 A Business Expansion
303.3.5 Relationships among Financial Statements
1077.4 Mutually Exclusive Alternatives
313.3.6 Case Study 3.3
1087.4.1 Maintain versus Replace
323.4 The Use of Graphs as an Analytical Tool
1097.4.2 Full-Fledged versus Economy
333.5 Regression Analysis
1107.4.3 Comparing Different Scenarios
343.6 Common ratios used in financial analysis
1117.5 Dealing with Risk and Changing Circumstances
353.6.1 Interpretation and Context
1127.5.1 Specifying Risk
363.6.2 Activity Ratios
1137.5.2 Ranges of Estimates
373.6.3 Case Study 3.4
1147.5.3 Business Investments as Options
383.6.4 Case Study 3.6
1157.5.4 Probabilistic Simulation
393.6.5 Liquidity Ratios
1167.5.5 Risk-Adjusted Return Standards
403.6.6 Solvency Ratios
1177.6 When to Use Investment Measures
413.6.7 Case Study 3.5
1187.7 Some Further Considerations
423.6.8 Profitability Ratios
1197.7.1 Leasing—A Financing Choice
433.6.9 Case Study 3.6
1207.7.2 Accelerated Depreciation
443.6.10 Integrated Financial Ratio Analysis
1217.7.3 Inflation and Investment Analysis
453.7 EQUITY ANALYSIS: 3.7.1 Valuation Ratios
1227.7.4 Accuracy
463.8 Credit analysis: 3.8.1 The Credit Rating Process
1237.8 Exercise
473.9 BUSINESS AND GEOGRAPHIC SEGMENTS
1248 Valuation and Business Performance
483.9.1 Segment Reporting Requirements
1258.1 Definitions of Value
493.9.2 Segment Ratios
1268.1.1 Economic Value
503.9.3 Case Study 3.8
1278.1.2 Market Value
513.10 Model building and forecasting
1288.1.3 Book Value
523.11 Exercise
1298.1.4 Liquidation Value
534 Managing Operating Funds
1308.1.5 Breakup Value
544.1 Funds Flow Cycles
1318.1.6 Reproduction Value
554.2 The Funds Cycle for Manufacturing
1328.1.7 Collateral Value
564.3 The Funds Cycle for Sales
1338.1.8 Assessed Value
574.4 The Funds Cycle for Services
1348.1.9 Appraised Value
584.5 Variability of Funds Flows
1358.1.10 Going Concern Value
594.5.1 Growth/Decline Variations
1368.1.11 Shareholder Value
604.5.2 Seasonal Variations
1378.2 Value to the Investor
614.6 Generalized Funds Flow Relationships: 4.6.1 Interpreting Funds Flow Data
1388.2.1 Bond Values
624.7 Funds Management and Shareholder Value
1398.2.2 Bond Yields
634.7.1 Cash Management
1408.2.3 Bond Provisions and Value
644.7.2 Working Capital Management
1418.2.4 Preferred Stock Values
654.7.3 Investment Management
1428.2.5 Common Stock Values
665 Projection of Financial Requirements
1438.3 Specialized Valuation Issues
675.1 Pro Forma Financial Statements
1448.3.1 Rights and Warrants
685.1.1 Pro Forma Income Statement
1458.3.2 Options
695.1.2 Pro Forma Balance Sheet
1468.4 Business Valuation
705.1.3 Pro Forma Cash Flow Statement
1478.4.1 Valuing the Equity
715.2 Cash Budgets
1488.4.2 Valuing the Total Company
725.3 Operating Budgets
1498.4.3 Using Shortcuts in Valuing an Ongoing Business
735.3.1 Sales Budget
1508.5 Exercise
745.3.2 Production Budget
151Glossary
755.4 Interrelationship of Financial Projections
152Appendix
765.5 Financial Modeling
153Index
775.6 Sensitivity Analysis
