FINANCIAL STATEMENTS ANALYSIS

Chapter 1 - Introduction: Accounting Basics

Chapter 2 - Financial Statements

Chapter 3 - Tools of Financial Statement Analysis

Chapter 4 - Earnings Quality

Chapter 5 - Valuation

References

The book provides a gradual approach to understanding and analysis financial statements, grasp the fundamentals to analyze earnings quality levels of firm financial reporting; and provide main tools for approaching firms’ valuations using accounting information. The first part of the book (Chapter 1 and 2) covers basic accounting concepts and recalls the main information conveyed through financial statements. This is instrumental to align the reader with the needed knowledge to analyze financial statements. Financial Statement Analysis is discussed as central part of the book (Chapter 3), where tools and techniques to properly understand firms’ soundness and financial performance are provided. As Financial Statement Analysis distinguishes itself from other approaches in a way that it uses publicly available information – external perspective - to form a basis of decision, instead of relying on speculation, the quality of financial information disseminated is crucial. To that end, Chapter 4 elaborate on the quality of earnings discussing determinants and consequences of different earnings quality levels, in connection with proxy to measure quality levels. The book concludes with an introductory, though complete, discussion of accounting based methodologies for firms’ valuations. Valuation is a key topic bridging accounting and finance and the reader towards the end of the book will get familiar with the most common valuation tools using accounting data.