Financial Statement Analysis and Security Valuation

By focusing on the output, rather than the input, this work asks what financial statements tell you, not how they are prepared. It concentrates on using financial statements in valuation, taking the approach that the best way to value a firm is to look at its future earnings. The main pretext of the text is that financial statement analysis and valuation analysis are inextricably entwined - valuation is an exercise in financial statement analysis, which, in turn, is directed by the need to get information for valuation. Accordingly, the text brings finance and accounting together, stressing concepts, but also showing how to move from concepts to practice.