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C O NTE NTS

1 Overview of Financial Concept of Income 91
Statement Analysis 2 Economic Concepts of Income 92
Business Analysis 4 Accounting Concept of Income 93
Analysis Implications 95
Introduction to Business Analysis 4
Fair Value Accounting 97
Types of Business Analysis 8
Understanding Fair Value Accounting 97
Components of Business Analysis 10
Financial Statements—Basis Considerations in Measuring
of Analysis 15 Fair Value 100
Analysis Implications 103
Business Activities 15
Introduction to Accounting
Financial Statements Reflect Business
Analysis 106
Activities 19
Need for Accounting Analysis 106
Additional Information 26
Financial Statement Analysis Earnings Management 108
Preview 27 Process of Accounting Analysis 112
Appendix 2A:
Analysis Tools 28
Auditing and Financial Statement
Valuation Models 40
Analysis 113
Analysis in an Efficient Market 44
Book Organization 46 Appendix 2B:
Earnings Quality 118
2 Financial Reporting
and Analysis 66 3 Analyzing Financing
Reporting Environment 68 Activities 136
Statutory Financial Reports 68 Liabilities 138
Factors Affecting Statutory Financial Current Liabilities 138
Reports 70 Noncurrent Liabilities 139
Nature and Purpose of Financial Analyzing Liabilities 141
Accounting 75 Leases 142
Desirable Qualities of Accounting Accounting and Reporting for
Information 75 Leases 144
Important Principles of Accounting 76 Analyzing Leases 148
Relevance and Limitations Restating Financial Statements for Lease
of Accounting 77 Reclassification 151
Accruals—Cornerstone Postretirement Benefits 153
of Accounting 79 Pension Benefits 154
Accrual Accounting—An Illustration 80 Other Postretirement Employee
Accrual Accounting Framework 81 Benefits 159
Relevance and Limitations of Accrual Reporting of Postretirement
Accounting 84 Benefits 159
Analysis Implications of Accrual Analyzing Postretirement
Accounting 88 Benefits 163
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