(BQ) Part 2 book "Accountants handbook" has contents: Analyzing financial statements, price change reporting, revenues and receivables, goodwill and other intangible assets, accounting for income taxes, financial institutions, accounting for government contracts,.and other contents. | CHAPTER 16 ANALYZING FINANCIAL STATEMENTS Gerald I. White, CFA Grace & White, Inc. Ashwinpaul C. Sondhi, PhD A. C. Sondhi and Associates, LLC SCOPE OF FINANCIAL STATEMENT ANALYSIS (a) External Users of Published Financial Statements (b) User Groups and Their Analytical Objectives (i) Equity Investors (ii) Creditors (c) Sources of Financial Information (d) Framework for Analysis 2 3 3 3 3 INCOME STATEMENT ANALYSIS 4 2 (a) The Concepts of Earning Power and Risk 4 (b) Sales and Revenue Analysis 4 (i) Trend Analysis 5 (ii) Variability 5 (iii) Components of Sales Trends 6 (iv) Comparative Trend Analysis 6 (c) Cost and Expense Analysis 7 (i) Classification of Costs 7 (ii) Margin Analysis 7 (iii) Analytical Adjustments 8 (iv) Operating Leverage 8 (v) Fixed Charges 9 (vi) Preferred Dividend Coverage 10 (d) Income Tax Analysis 10 (e) Earning Power Analysis 11 (d) Expense Deferrals (e) Revenue Recognition (f) Discontinued Operations, Extraordinary Gains (Losses), and Unusual Items (g) Changing Prices (h) Foreign Operations (i) Postemployment Benefits (i) Analysis of SFAS No. 106 Disclosures (ii) Impact of Actuarial Assumptions (iii) Impact of Mergers and Acquisitions (j) Mergers and Acquisitions (k) Push Down Accounting (l) Analysis of Segment Data (m) Analysis of Interim Results (n) International Reporting Differences (i) International Accounting Standards Board (IASB) (ii) Reporting by Foreign Issuers in the United States (o) Analysis of Investments (p) Stock Compensation Plans (q) Earnings per Share 2 ACCOUNTING AND REPORTING ISSUES 12 (a) The Quality of Earnings (b) Inventory (c) Depreciation 12 12 13 13 14 14 15 16 17 18 18 19 19 20 20 21 21 21 21 22 23 23 BALANCE SHEET ANALYSIS 23 (a) Elements of the Balance Sheet (b) Liquidity Analysis (i) Analytical Ratios (ii) Activity Ratios (c) Analysis of Long-Term Assets and Liabilities (i) Fixed Asset Turnover Ratio (ii) Capitalization Analysis (iii) Capitalization .
