Interpreting and Analyzing Financial Statements, 1/e
Karen P. Schoenebeck, Wichita State University
Published July, 1997 by Prentice Hall Business Publishing
Copyright 1998, 165 pp.
Sign up for future
mailings on this subject.
See other books about:
Introduction to Financial Accounting-Accounting
Suitable for use as a supplemental text in an undergraduate
Financial Accounting course. It is designed to accompany Harrison
and Horngren's Financial Accounting, 3rd Edition textbut
equally adaptable as a supplement for other introductory financial
accounting books. Promoting confidence in their strategic abilities,
this series of preliminary activities helps prepare financial accounting
students for a capstone project creating a comprehensive financial
statement analysis. Each activity concentrates on only one aspect
of the analysis and uses data from well-known corporations to pique
students' interest and add relevancy.
Draws financial statements from such companies as American
Airlines, AT&T, Chrysler, Microsoft, Wal-Mart, and more.
Focuses on interpretation and analysis, keeping calculations
to a minimum so students can better focus their time and attention.
Contains a wealth of activities that can generate class
discussion or be used as individual or group assignments.
Compares carefully selected companies so students get a
feel for the range and magnitude of expected amounts and ratios in
the corporate world.
Introduces financial statements using four-years of comparative
information; each line item is studied separately, and key questions
highlight important trends.
Involves a research component in at least one activity
per chapter, i.e., reading the Wall Street Journal, surfing the world-wide-web,
or calling a local bank.
Emphasizes the significant role ratios have in analyzing
Uses trend analysis to evaluate both the income statement
and the balance sheet.
- Enables students to acquire a feel for the expected range
and magnitude of the ratios and identify whether a high or low ratio
is usually preferred.
Corporate Analysis final project, with four parts, requires
students to research , analyze, and prepare a comprehensive written
report. Each part can be assigned throughout the term, or it can be
assigned as a whole capstone project.
- Places an emphasis on comparing the rate of increase
or decrease of various account classifications within each financial
1. Introduction to the Income Statement and the Balance
Activity 1: Examining Total Assets: Comparing Companies.
Activity 2: Examining Assets Within the Automobile Industry. Activity
3: Examining How Assets are Financed: Comparing Companies. Activity
4: Examining Net Sales: Comparing Companies. Activity 5: Examining
Net Sales Within the Retail Industry. Activity 6: Examining Net Income
and Return on Sales within the Auto Industry. Activity 7: Fortune
500 Companies. Activity 8: Test Your Understanding: A Review of
Chapter 1. Activity 9: Internet Research: The Global 500
2. Introduction To Analysis.
Activity 10: Ratio Analysis: Current Ratio. Activity 11:
Ratio Analysis: Debt Ratio. Activity 12: Ratio Analysis: Rate of Return
on Net Sales. Activity 13: Ratio Analysis: Asset Turnover. Activity
14: Ratio Analysis: Rate of Return on Total Assets. Activity 15: Test
Your Understanding: A Review of Ratio Analysis. Activity 16: Trend
Analysis: Income Statement. Activity 17: Trend Analysis: Balance Sheet.
Common-Sized Statement Analysis: Income Sheet. Activity 19: Common-Sized
Statement Analysis: Balance Sheet. Activity 20: Test Your Understanding:
A Review of Trend Analysis and Common-Sized Statements. Activity 21:
Internet Research: Using the Forbes Web Site.
3. Interpreting and Understanding Amounts on Financial
Activity 22: Service, Merchandising or Manufacturing Company.
Activity 23: Cash and Cash Equivalents. Activity 24: Short-Term Investments.
Activity 25: Accounts Receivable. Activity 26: Inventory. Activity
27: Property, Plant, and Equipment. Activity 28: Long-Term Investments.
Activity 29: Current and Long-Term Liabilities. Activity 30: Stockholders'
Equity. Activity 31: Transactions Affecting Total Assets. Activity
32: Transactions Affecting Total Liabilities. Activity 33: Transactions
Affecting Total Stockholders' Equity. Activity 34: Transactions Affecting
Net Income. Activity 35: Multiple-Step Income Statement. Activity
36: Which Financial Statement? Activity 37: Test Your Understanding:
Interpreting and Understanding Amounts on the Balance Sheet. Activity
38: Test Your Understanding: Interpreting and Understanding
Amounts on the Income Statement. Activity 39: Ethics Affecting Financial
Statement Amounts: Accounts Receivable. Activity 40: Ethics Affecting
Financial Statement Amounts: Inventory. Internet Research: Using
the Edgar Database.
4. Further Your Understanding.
Activity 42: Recent Business Article. Activity 43: Current
Market Interest Rates. Activity 44: Examining Bond Yields. Activity
45: Examining the Prime Rate and Bond Yields: Using The Wall Street
Journal. Activity 46: Examining the Bond Market. Activity 47: Examining
the Bond Market: Using The Wall Street Journal. Activity 48: Examining
the Bond Market: Using the Internet. Activity 49: Examining the Dow
Jones Industrial Average: Using The Wall Street Journal. Activity
50: How to Read Stock Quotes: Using The Wall Street Journal. Activity
51: Following the Stock Market: Using The Wall Street Journal or the
Internet. Activity 52: Examining the Dow Jones Industrial Average:
Using the Internet. Activity 53: Examining Historical Stock Information:
Using the Internet.
5. Analyzing Your Balance Sheet.
Activity 54: Strategies for Analyzing the Balance Sheet.
Activity 55: Understanding Computer Printouts, Classifying Unfamiliar
Accounts, and Interpreting Minus Signs: Assets. Activity 56: Understanding
Computer Printouts, Classifying Unfamiliar Accounts, and Interpreting
Minus Signs: Liabilities and Stockholders' Equity. Activity 57: Trend
Analysis. Activity 58: Common-Sized Statements. Activity 59: Industry
Norms: Eating Places. Activity 60: Analysis of Vanguard Airlines Inc.
Activity 61: Analysis if America Online Inc. Activity 62: Test
Your Understanding: Analyzing the Balance Sheet. Activity 63: Internet
Research: Using Infoseek.
6. Analyzing The Income Statement.
Activity 64: Strategies for Analyzing the Income Statement.
Activity 65: Understanding Computer Printouts, Classifying Unfamiliar
Accounts, and Interpreting Minus Signs: Income Statement. Activity
66: Analyzing the Income Statement: Using General Motors. Activity
67: Trend Analysis: Using the Walt Disney Company. Activity 68: Common-Sized
Statements. Activity 69: Industry Norms: Air Transportation, Scheduled.
Activity 70: Analysis of AT&T Corporation. Activity 71: Analysis of
Best Buy Company. Activity 72: Test Your Understanding: Analyzing
the Income Statement. Activity 73: Internet Research: Using
7. Analyzing the Statement of Cash Flows.
Activity 74: Operating Activities. Activity 75: Investing
Activities. Activity 76: Financing Activities. Activity 77: Operating,
Investing, or Financing? Activity 78: Operating, Investing, or Financing?
Activity 79: List Operating, Investing, and Financing Activities.
Activity 80: Analysis of Procter & Gamble. Activity 81: Analysis of
Saks Holdings Inc. Activity 82: Test Your Understanding: Of
the Statement of Cash Flows. Activity 83: Internet Research:
Using the AICPA Web Site and Researching Ethics.
8. Further Radio Analysis.
Activity 84: Researching Industry Norms. Activity 85: Acid-Test
(Quick) Ratio. Activity 86: Days' Sales in Receivables. Activity 87:
Accounts Receivable Turnover. Activity 88: Gross Margin Percentage.
Activity 89: Inventory Turnover. Activity 90: Times-Interest-Earned.
Activity 91: Rate of Return on Total Assents. Activity 92: Rate of
Return on Common Shareholders' Equity. Activity 93: Earning Per Share
of Common Stock. Activity 94: Earning Per Share of Common Stock. Activity
95: Price/Earnings (PE Ratio). Activity 96: Dividend Yield. Activity
97 Book Value Per Share of Common Stock. Activity 98: Test Your
Understanding: A Review of Further Radio Analysis. Activity 99
Internet Research: Using the Fortune Web Site.
9. Corporate Analysis.
Activity 100: Part I: Tell Me About Your Company. Activity
101: Part II: Prepare Financial Statements in Condensed Format and
a Written Analysis. Activity 102: Part III: Compute Ratios and Compare
to Industry Norms. Activity 103: Part IV: Would You Advise a Friend
to Invest in this Company?