Financial Reporting, Financial Statement Analysis and Valuation,
10th Edition

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

ISBN-13: 9780357722091
Copyright 2023 | Published
944 pages | List Price: USD $312.95

Learn to conduct financial statement analysis as you review actual financial statements from real companies with Wahlen/Baginski/Bradshaw's FINANCIAL REPORTING, FINANCIAL STATEMENT ANALYSIS AND VALUATION, 10E. This balanced, comprehensive approach reflects the latest developments in accounting standards, financial analysis and valuation. You apply concepts from economics, business strategy, finance and accounting as you progress through a unique six-step process for analysis and valuation. Quick Checks after each section remind you of key insights. Each chapter includes a continuing example from The Clorox Company so you can apply each step of the analysis and valuation process to real financial statements. Numerous actual examples, problems and cases also include a continuing end-of-chapter case from Walmart. MindTap digital resources and an updated Financial Statements Analysis Package (FSAP) provide an Excel® model to make the analysis, forecasting and valuation process more efficient.


1. Overview of Financial Reporting, Financial Statement Analysis, and Valuation.
2. Asset and Liability Valuation and Income Recognition.
3. Understanding the Statement of Cash Flows.
4. Profitability Analysis.
5. Risk Analysis.
6. Accounting Quality.
7. Financing Activities.
8. Investing Activities.
9. Operating Activities.
10. Forecasting Financial Statements.
11. Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach.
12. Valuation: Cash-Flow Based Approaches.
13. Valuation: Earnings-Based Approaches.
14. Valuation: Market-Based Approaches.
Appendix A: Financial Statements and Notes for The Clorox Company.
Appendix B (online): Management's Discussion and Analysis for The Clorox Company.
Appendix C: Financial Statement Analysis Package (FSAP).
Appendix D (online): Financial Statement Ratios: Descriptive Statistics by Industry.

  • James M. Wahlen

    James M. Wahlen is the James R. Hodge Chair of Excellence, professor of accounting, former chair of the accounting department, and the former chair of the M.B.A. program at the Kelley School of Business at Indiana University. Dr. Wahlen received his Ph.D. from the University of Michigan and has served on the faculties of the University of North Carolina at Chapel Hill, the University of Washington and Pacific Lutheran University. He has also been a visiting professor at the University of Chicago, INSEAD and Sungkyunkwan University. Dr. Wahlen’s teaching and research interests focus on financial accounting, financial statement analysis and the capital markets. He investigates financial statements analysis, testing the extent to which earnings and other financial statement information can predict future stock returns, earnings quality and earnings management, earnings volatility as an indicator of risk, fair value accounting for financial instruments and accounting for loss reserve estimates by banks and insurers. His research has been published in a wide array of academic and practitioner journals in accounting and finance. He has public accounting experience in both Milwaukee and Seattle and is a member of the American Accounting Association. Dr. Wahlen has received numerous teaching awards during his career. In his free time, he enjoys spending time with his wife and daughters, spoiling his adorable granddaughters, playing outdoor sports (biking, hiking, skiing, golf), cooking (and, of course, eating), and listening to rock music (especially if it is loud and live).

  • Stephen P. Baginski

    Stephen P. Baginski is the Herbert E. Miller Chair in Financial Accounting at the University of Georgia’s J.M. Tull School of Accounting. He received his Ph.D. from the University of Illinois, and he has taught a variety of financial and managerial undergraduate, M.B.A. and executive education courses at the University of Georgia, Indiana University, Illinois State University, the University of Illinois, Northeastern University, Florida State University, Washington University in St. Louis, the University of St. Galen, the Swiss Banking Institute at the University of Zurich, Bocconi and INSEAD. Dr. Baginski has published articles in a variety of journals including The Accounting Review, Journal of Accounting Research, Contemporary Accounting Research, Review of Accounting Studies, The Journal of Risk and Insurance, Accounting Organizations and Society and The European Accounting Review. His research primarily deals with the causes and consequences of voluntary management disclosures of earnings forecasts, and he also investigates the usefulness of financial accounting information in security pricing and risk assessment. Dr. Baginski has served on several editorial boards and as an associate editor at Accounting Horizons and The Review of Quantitative Finance and Accounting. He has won numerous undergraduate and graduate teaching awards at the department, college and university levels during his career, including the Doctoral Student Inspiration Award from students at Indiana University. Dr. Baginski loves to watch college football, play golf, and run (very slowly) in his spare time.

  • Mark Bradshaw

    Mark T. Bradshaw is professor of accounting, chair of the department and William S. McKiernan ’78 Family Faculty Fellow at the Carroll School of Management of Boston College. Dr. Bradshaw received a Ph.D. from the University of Michigan Business School and earned a B.B.A. summa cum laude with highest honors in accounting and a master’s degree in financial accounting from the University of Georgia. He previously taught at the University of Chicago, Harvard Business School and the University of Georgia. Dr. Bradshaw was a certified public accountant with Arthur Andersen & Co. in Atlanta. Today, he conducts research on capital markets, specializing in the examination of securities analysts and financial reporting issues. His research has been published in a variety of academic and practitioner journals, and he serves as an editor for The Accounting Review and as associate editor for Journal of Accounting and Economics, Journal of Accounting Research and Journal of Financial Reporting. Dr. Bradshaw is also on the editorial board of Review of Accounting Studies and the Journal of International Accounting Research. In addition, he is a reviewer for numerous other accounting and finance journals. Dr. Bradshaw has authored a book with Brian Bruce: ANALYSTS, LIES, AND STATISTICS—CUTTING THROUGH THE HYPE IN CORPORATE EARNINGS ANNOUNCEMENTS. Approximately 25 pounds ago, Dr. Bradshaw was an accomplished cyclist. Currently focused on additional leisurely pursuits, he nevertheless routinely passes younger and thinner cyclists.

  • NEW CONTINUING CASE EXAMPLE FEATURES FINANCIAL REPORTING FOR THE CLOROX COMPANY. Students are able to apply all of the steps of the analysis, forecasting and valuation process to a new company: The Clorox Company. This engaging, timely and relevant golden-thread case company is featured throughout the book. You can use this strong, ongoing example company for in-class activities or discussion or for out-of-class assignments.

  • NEW EMPHASIS ORIENTS RATIOS ANALYSIS TOOLS ON THE DRIVERS OF VALUE: PROFITABILITY, GROWTH AND RISK. Students use ratio analysis tools to focus on The Clorox Company in each chapter. Students benchmark each analysis using Clorox’s key competitor, Procter & Gamble. Both of these ongoing example companies are well-known to your students and are particularly relevant as the pandemic continues.

  • UPDATED COVERAGE OF RATIOS ANALYSIS, ACCOUNTING QUALITY ANALYSIS AND FORECASTING REFLECTS THE LATEST ACCOUNTING STANDARDS. These updates include the new standards for revenue recognition and right-of-use assets and liabilities.

  • NEW CONTENT DEMONSTRATES HOW TO COMPUTE IMPUTED INTEREST EXPENSE IN OPERATING LEASE LIABILITIES. Student also learn how to adjust operating income and interest expense to include imputed interest expense on leases within interest expense rather than within operating income. Students examine why this step is necessary for appropriate analysis of profitability for firms that have material amounts of imputed interest expense from operating lease liabilities. Students also learn why to conduct this step when comparing firms using U.S. GAAP versus IFRS.

  • UPDATED CONTENT ON FORECASTING AND VALUATION DEMONSTRATES HOW A COMPANY CAN APPEAR TO BE OVERVALUED. Using the ongoing example of The Clorox Company, students examine how the organization appears to be overvalued at the time of the analysis, following fiscal year 2020. Students can also compare how, since that time, market share prices for Clorox have declined and are more in line with the authors' value estimates.

  • REVISED AND UPDATED END-OF-CHAPTER PROBLEMS AND APPLICATIONS USE REAL COMPANIES AND THE LATEST FINANCIAL STATEMENT INFORMATION. Current end-of-chapter materials also include an ongoing golden-thread case company based on Walmart. You can use this as a consistent case assignment through the course that enables students to apply all of the steps to the analysis and valuation process.

  • STREAMLINED PRESENTATIONS IN EACH CHAPTER CREATE A WELL-WRITTEN, ACCESSIBLE TEXT. Known for its clear presentation, this edition provides concise, direct discussions that quickly and efficiently emphasize key insights. To ensure a streamlined presentation, some highly technical and accounting-related material now appears only in online appendices that students can easily access.

  • QUICK CHECKS IN EACH CHAPTER HIGHLIGHT KEY INSIGHTS FOR EVERY SECTION. All content for each section as well as end-of-chapter questions, exercises, problems and cases are cross-referenced to specific learning objectives. This further ensures that your students can implement the critical skills and techniques associated with each of the learning objectives.

  • KEY CHAPTERS OFFER INSIGHTS ON PROFITABILITY ANALYSIS (CH. 4) AND RISK ANALYSIS (CH. 5). These chapters continue to highlight disaggregation of return on common equity along traditional lines of profitability, efficiency and leverage as well as along operating versus financing lines.

  • COMPANION WEBSITE FOR THIS EDITION OFFERS UPDATED FINANCIAL RATIOS AND OTHER HELPFUL RESOURCES. An updated Appendix D on the companion website provides descriptive statistics on 20 commonly used financial ratios computed during the past ten years for 48 different industries. This ratios data enables students to benchmark their analyses and forecasts against industry averages.

  • CHAPTERS ON ACCOUNTING QUALITY DISCUSS FINANCING, INVESTING AND OPERATING ACTIVITIES. Readers learn the determinants of accounting quality, how to evaluate accounting quality and how to adjust reported earnings and financial statements to cleanse low-quality accounting items. Discussion follows business activities, from raising financial capital and investing in productive assets to operating the business. Examples of foreign currency translation and accounting for various hedging activities also appear in online appendices.

  • CHAPTERS ON ACCOUNTING QUALITY PROVIDE IN-DEPTH ANALYSIS. Chapters 6 through 9 explore balance sheet quality and income statement quality in detail to prepare students for financial reporting success. These chapters, along with the analysis chapters, include discussion of the latest accounting standards for revenue recognition and leases.

  • EACH CHAPTER DISCUSSES CURRENT DEVELOPMENTS IN U.S. GAAP AND IFRS. Students examine how U.S. GAAP compares to IFRS and how to deal with such differences in financial statement analysis, including the different treatments of rent expense arising from operating leases. End-of-chapter materials contain many problems and cases involving non-U.S. companies, with application of financial statement analysis techniques to IFRS-based financial statements.

  • EACH CHAPTER INCORPORATES A "GOLDEN THREAD" OR ONGOING COMPANY EXAMPLE. This edition highlights The Clorox Company. Just as past editions have successfully used continuing examples, this edition clearly illustrates the material in each chapter by referencing the financial statements and disclosures from The Clorox Company.

  • CHAPTERS PROVIDE TIMELY INSIGHTS DRAWN FROM EMPIRICAL ACCOUNTING RESEARCH. Each chapter emphasizes a number of relevant, recent research developments regarding financial statement analysis and valuation.

  • UPDATED INTEGRATIVE CASES AT THE END OF EACH CHAPTER HIGHLIGHT WALMART. Continuous, integrated case material at the conclusion of each chapter applies the concepts and tools discussed in that chapter to financial issues at Walmart.

  • END-OF-CHAPTER PRACTICE HIGHLIGHTS NEW PROBLEMS AND CASES. Each chapter contains exercises, problems and cases drawn from real companies’ financial statements. This material is written for maximum learning value.

  • FINANCIAL STATEMENT ANALYSIS PACKAGE (FSAP) OFFERS MORE PRACTICE. The FSAP designed to accompany this book is now updated to be more user-friendly. The FSAP offers additional valuable tools for mastering the book's content.

  • MINDTAP DIGITAL LEARNING SOLUTION POWERS STUDENTS FROM MEMORIZATION TO MASTERY. Designed specifically to accompany this edition, MindTap online resources give you complete control of your course. You are able to provide engaging content, challenge every individual and to build student confidence. Empower students to accelerate their progress with MindTap.

Cengage provides a range of supplements that are updated in coordination with the main title selection. For more information about these supplements, contact your Learning Consultant.

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