The Stand (Uncut and Illustrated)

How to Use the CFA Program Curriculum CFA Institute Learning Ecosystem (LES) Designing Your Personal Study Program Errata Other Feedback Financial Statement Analysis Learning Module 1 Introduction to Financial Statement Analysis Introduction Financial Statement Analysis Framework Articulate the Purpose and Context of the Analysis Collect Data Process Data Analyze/Interpret the Data Develop and Communicate Conclusions and Recommendations Follow-Up Scope of Financial Statement Analysis Regulated Sources of Information International Organization of Securities Commissions US Securities and Exchange Commission Capital Markets Regulation in Europe Financial Notes and Supplementary Schedules Business and Geographic Segment Reporting Management Commentary or Management’s Discussion and Analysis Auditor's Reports Comparison of IFRS with Alternative Financial Reporting Systems Monitoring Developments in Financial Reporting Standards New Products or Types of Transactions Evolving Standards and the Role of CFA Institute Other Sources of Information Practice Problems Solutions Learning Module 2 Analyzing Income Statements Introduction Revenue Recognition General Principles Accounting Standards for Revenue Recognition Expense Recognition General Principles Capitalization versus Expensing Capitalization of Interest Costs Capitalization of Internal Development Costs Implications for Financial Analysts: Expense Recognition Non-Recurring Items Unusual or Infrequent Items Discontinued Operations Changes in Accounting Policy Changes in Scope and Exchange Rates Earnings per Share Simple versus Complex Capital Structure Basic EPS Diluted EPS: The If-Converted Method Diluted EPS When a Company Has Convertible Preferred Stock Outstanding Diluted EPS When a Company Has Convertible Debt Outstanding Diluted EPS: The Treasury Stock Method Other Issues with Diluted EPS and Changes in EPS Changes in EPS Income Statement Ratios and Common-Size Analysis Common-Size Analysis of the Income Statement Income Statement Ratios Practice Problems Solutions Learning Module 3 Analyzing Balance Sheets Introduction Intangible Assets Identifiable Intangibles Goodwill Financial Instruments Non-Current Liabilities Long-Term Financial Liabilities Deferred Tax Liabilities Ratios and Common-Size Analysis Common-Size Analysis of the Balance Sheet Some interesting general observations can be made from these data: Balance Sheet Ratios Practice Problems Solutions Learning Module 4 Analyzing Statements of Cash Flows I Introduction Linkages between the Financial Statements Primary Financial Statements Relationship between Financial Statements Linkages Between Current Assets and Current Liabilities The Direct Method for Cash Flows from Operating Activities Operating Activities: Direct Method The Indirect Method for Cash Flows from Operating Activities Operating Activities: Indirect Method Conversion from the Indirect to Direct Method Method to Convert Cash Flow from Indirect to Direct Cash Flows from Investing Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Cash Flow from Financing activities: Long-Term Debt and Common Stock Computing Dividends Paid Differences in Cash Flow Statements Prepared under US GAAP versus IFRS Practice Problems Solutions Learning Module 5 Analyzing Statements of Cash Flows II Introduction Evaluating Sources and Uses of Cash Ratios and Common-Size Analysis Free Cash Flow Measures Cash Flow Statement Analysis: Cash Flow Ratios Practice Problems Solutions Learning Module 6 Analysis of Inventories Introduction Inventory Valuation The Effects of Inflation and Deflation on Inventories, Costs of Sales, and Gross Margin Presentation and Disclosure Presentation and Disclosure Inventory Ratios Practice Problems Solutions Learning Module 7 Analysis of Long-Term Assets Introduction Acquisition of Intangible Assets Intangible Assets Purchased in Situations Other Than Business Combinations Intangible Assets Developed Internally Intangible Assets Acquired in a Business Combination Impairment and Derecognition of Assets Impairment of Property, Plant, and Equipment Impairment of Intangible Assets with a Finite Life Impairment of Intangibles with Indefinite Lives Impairment of Long-Lived Assets Held for Sale Reversals of Impairments of Long-Lived Assets Derecognition Presentation and Disclosure Using Disclosures in Analysis Practice Problems Solutions Learning Module 8 Topics in Long-Term Liabilities and Equity Introduction Leases Requirements for Lease Accounting Examples of Leases Advantages of Leasing Lease Classification as Finance or Operating Financial Reporting of Leases Lessee Accounting—IFRS Lessee Accounting—US GAAP Lessor Accounting Financial Reporting for Postemployment and Share-Based Compensation Plans Employee Compensation Deferred Compensation Defined-Benefit Pension Plans Accounting for Defined-Benefit Plans under IFRS Accounting for Defined-Benefit Plan under US GAAP Pension-Related Disclosures Share-Based Compensation Stock Grants Stock Options Accounting for Stock Options Other Types of Share-Based Compensation Presentation and Disclosure Presentation and Disclosure of Leases Lessee Disclosure Lessor Disclosure Presentation and Disclosure of Postemployment Plans Presentation and Disclosure of Share-Based Compensation Practice Problems Solutions Learning Module 9 Analysis of Income Taxes Introduction Differences between Accounting Profit and Taxable Income Taxable Temporary Differences Deductible Temporary Differences Taxable and Deductible Temporary Differences Permanent Differences Tax Expense Deferred Tax Assets and Liabilities Realizability of Deferred Tax Assets Corporate Income Tax Rates Presentation and Disclosure Practice Problems Solutions Learning Module 10 Financial Reporting Quality Introduction Conceptual Overview Conceptual Overview GAAP, Decision Useful Financial Reporting GAAP, Decision-Useful, but Sustainable? Biased Accounting Choices Within GAAP, but “Earnings Management” Departures from GAAP Differentiate between Conservative and Aggressive Accounting Conservatism in Accounting Standards Bias in the Application of Accounting Standards Context for Assessing Financial Reporting Quality Motivations Conditions Conducive to Issuing Low-Quality Financial Reports Mechanisms That Discipline Financial Reporting Quality Market Regulatory Authorities Auditors Private Contracting Detection of Financial Reporting Quality Issues: Introduction and Presentation Choices Presentation Choices Accounting Choices and Estimates How Accounting Choices and Estimates Affect Earnings and Balance Sheets Accounting Choices That Affect the Cash Flow Statement Accounting Choices that Affect Financial Reporting Warning Signs Pay Attention to Revenue Pay Attention to Signals from Inventories Pay Attention to Capitalization Policies and Deferred Costs Pay Attention to the Relationship between Cash Flow and Net Income Look for Other Potential Warnings Signs References Practice Problems Solutions Learning Module 11 Financial Analysis Techniques Introduction The Financial Analysis Process The Objectives of the Financial Analysis Process Distinguishing between Computations and Analysis Analytical Tools and Techniques Financial Ratio Analysis The Universe of Ratios Value, Purposes, and Limitations of Ratio Analysis Sources of Ratios Common Size Balance Sheets and Income Statements Common-Size Analysis of the Income Statement Cross-Sectional, Trend Analysis, and Relationships in Financial Statements Trend Analysis Relationships Among Financial Statements The Use of Graphs and Regression Analysis Regression Analysis Common Ratio Categories, Interpretation, and Context Interpretation and Context Activity Ratios Calculation of Activity Ratios Interpretation of Activity Ratios Liquidity Ratios Calculation of Liquidity Ratios Interpretation of Liquidity Ratios Solvency Ratios Calculation of Solvency Ratios Interpretation of Solvency Ratios Profitability Ratios Calculation of Profitability Ratios Interpretation of Profitability Ratios Integrated Financial Ratio Analysis The Overall Ratio Picture: Examples DuPont Analysis—The Decomposition of ROE Industry-Specific Financial Ratios Model Building and Forecasting References Practice Problems Solutions Learning Module 12 Introduction to Financial Statement Modeling Introduction Building a Financial Statement Model Company Overview Revenue Forecast COGS SG&A Expenses and Other Operating Expenses Operating Profit by Segment Non-Operating Items Corporate Income Tax Forecast Shares Outstanding Pro Forma Income Statement Pro Forma Statement of Cash Flows Capital Investments and Depreciation Forecasts Working Capital Forecasts Forecasted Cash Flow Statement Forecasted Balance Sheet Valuation Model Inputs Behavioral Finance and Analyst Forecasts Overconfidence in Forecasting Illusion of Control Conservatism Bias Representativeness Bias Confirmation Bias The Impact of Competitive Factors in Prices and Costs Cognac Industry Overview Modeling Inflation and Deflation Sales Projections with Inflation and Deflation Cost Projections with Inflation and Deflation The Forecast Horizon and Long-Term Forecasting Case Study: Estimating Normalized Revenue References Practice Problems Solutions Glossary