FINANCIAL STATEMENT ANALYSIS AND SECURITY VALUATION PENMAN S. Księgarnia

Overview

Penman's Financial Statement Analysis and Security Valuation 2/e focuses on the output of financial statements, not the input. As such, the book asks what financial statements tell you, not how they are prepared. The idea is to get students to see accounting "working." The book focuses on using financial statements in valuation. The text takes the approach that the best way to accurately value a firm is to look at the future earnings of the firm. The main pretext of the book is that financial statement analysis and valuation analysis are inextricably entwined: valuation is an exercise in financial statement analysis. Financial statement analysis is directed by the need to get information for valuation. Accordingly, the book brings finance and accounting concepts together. The book stresses concepts, but the idea is to show how to move from concepts to practice.

New to This Edition

In the second edition, Penman has modified the model to provide flexibility in teaching styles. Each part is a distinct module so the parts may be taught out of order without causing the reader much difficulty. However, it is recommended that the chapters within each part be taught sequentially.
Penman will be available on Primis and the modularity of the text will lend itself nicely to customization.
Chapter 1 has been reduced in size and focuses on getting the reader excited about analysis. The current market bubble is used as a context to motivate the reader. The notion of the financial statement being a lens on the business is introduced and an Enron-style case is used to show a case where that lens has been distorted. Chapter 1 will also have more emphasis on strategy.
Chapter 2 has been slimmed down and provides an outline of the financial statements and how they are tied together. The idea of comprehensive income is now included in chapter 2 rather than chapter 5.
Part I has been changed to provide a focused module on the valuation models and how they tie to accounting.
Chapter 3 brings the development of valuation models together in one chapter and contrasts fundamental valuation approaches to the method of comparables and asset-based valuation. The chapter begins with 'simple' valuation techniques that used to be in chapter 2, then leads the student into the architecture of valuation models. The chapter introduces the dividend discount models as a point of departure for the cash and accrual accounting-based models in chapter 4. The somewhat technical material on stock returns has been moved to an appendix. This chapter ends with a roadmap to the rest of the book.
Chapter 4 begins the development of accounting-based valuation models, with the focus on cash accounting and discounted cash flow analysis. Valuation models and accounting are even more closely integrated, using discounted cash flow analysis to contrast the features of cash accounting and accrual accounting. Responding to market feedback, the material from the first half of the old chapter 5 is now here, as a setup for chapters 5 and 6. The material on the relationship between earnings and stock returns, previously in chapter 5, is in an appendix to chapter 4.
Chapter 6 complements the price-to-book valuation with a price-earnings approach. This chapter also sets up the later chapters on P/E analysis. The catalyst for this new chapter is the recent Olson-Jeuttner-Nauroth P/E model. The inclusion of this chapter in Part I means that all the material on valuation models is in one part of the book. The rest of the book is application and refinement of these models.
Part III--the P/E chapter (chapter 14) will now follow the P/B (or the Price to book ratio) chapter. Chapter 14 will be adapted to build from chapter 6. Chapter 16 on full-information forecasting will slant more towards strategy.
In Part IV chapter 19 from the first edition has been removed and the Quality of Earnings chapter (chapter 18) is being revamped.
The concluding chapter will take the analysis of the book to the trading floor. It will contrast fundamental analysis and behavioral finance approaches, report of research on fundamental anomalies, and deal with adapting to risk in investing.
Features
This book provides an integrated model for valuing companies based on earnings-based valuation. This model is used by prominent investment firms such as Morgan Stanley and Goldman Sachs.
Pedagogical features of the chapter opening flow charts, the Analyst's checklist, and the analyst's toolkit will be retained. The Web Connection box will be placed at the end of each chapter and direct students to features on the web page for the chapter, including accounting material. From chapter 7 onwards students will be directed to the Building Your Own Analysis and Valuation Tool on the website and it will be explained how features in each chapter can be built into the tool.
End of chapter material will be updated, but many of the exercises will be retained. A number of new cases have been developed. The exercises will be graded on degree of difficulty with more easy exercises inserted. Exercises will also be linked to the appropriate point in the text.

Table of Contents

1. Introduction to Investing and Valuation
2. Introduction to the Financial Statements

Part 1 Financial Statements and Valuation

3. How Financial Statements Are Used in Valuation
4. Cash Accounting, Accrual Accounting and Discounted Cash Flow Valuation
5. Accrual Accounting and Valuation: Pricing Book Values
6. Accrual Accounting and Valuation: Pricing Earnings

Part 2 The Analysis of Financial Statements

7. Business Activities and Financial Statements
8. The Analysis of the Statement of Shareholders' Equity
9.The Analysis of the Balance Sheet and Income Statement
10. The Analysis of the Cash Flow Statement
11. The Analysis of Profitability
12. The Analysis of Growth and Sustainable Earnings

Part 3 Forecasting, Valuation and Strategy

13. The Value of Operations and the Evaluation of Enterprise Price-to-Book Ratios and Price-Earnings Ratios
14.Simple Forecasting and Simple Valuation
15. Full-Information Forecasting, Valuation, and Business Strategy Analysis

Part 4 Accounting Analysis and Valuation

16. Creating Accounting Value and Economic Value
17. Analysis of the Quality of the Financial Statements

Part 5 The Analysis of Risk

18. The Analysis of Equity Risk and the Cost of Capital
19. The Analysis of Credit Risk

Po otrzymaniu zamówienia poinformujemy,
czy wybrany tytuł polskojęzyczny lub anglojęzyczny jest aktualnie na półce księgarni.