The text and activities format allow the instructor to use this book as a stand-alone text for the first accounting course.
This text helps students analyze real company financial statement information. Each activity in the book concentrates on only one aspect of the analysis and uses data from well-known corporations to pique students' interest and add relevancy.
Key Features
- The text sections are engaging to read but also provide students with a useful reference tool.
- The activity sections encourage students to learn accounting through real-life examples, to interact with the companies studied.
- In Chapter 1, students immediately learn about the basic financial statements. At once they learn four basic financial analysis ratios, common-size analysis, and trend analysis. They will use these tools throughout the course.
- Chapters 2 through 5 cover the basic financial statements, with full chapters dedicated to the statement of cash flows and the statement of stockholders’ equity.
- Chapter 6 deals with topics that are traditionally covered in the first accounting course, such as inventory and property, plant and equipment.
- Chapter 7, students learn the accounting cycle, with the debit-credit system, adjusting, and closing journal entries.
- Chapter 8 offers a comprehensive review of all topics covered in previous chapters. Activities walk students through financial analyses of real companies, working with more than one financial statement and combining issues in profitability, efficiency, liquidity and solvency.
- Chapter 9 provides a project for each student to research, analyze, and prepare a comprehensive written report and presentation on the public corporation of their choice.
New to This Edition - Crossword puzzles that reinforce accounting concepts and vocabulary.
- The common-size Statement of Cash Flows is now introduced in Chapter 5.
- Another comprehensive problem, featuring Chipotle Mexican Grill, is added to Chapter 8.
- The Capstone Project is streamlined into only two activites--a written report and a presentation.
- Throughout the text, financial statements have been updated to the most current amounts available on December 31, 2011.
Contents
Chapter 1: Introduction
- Nike, Under Armour, Adidas
- WHAT IS ACCOUNTING?
- THE FOUR FINANCIAL STATEMENTS
- THE BALANCE SHEET
- THE INCOME STATEMENT
- STATEMENT OF STOCKHOLDERS’ EQUITY
- STATEMENT OF CASH FLOWS
- GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
- Historical Cost Principle
- INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
- RATIO ANALYSIS
- Debt Ratio
- Asset Turnover Ratio
- Return on Sales (ROS) Ratio
- Return on Assets (ROA) Ratio
- TREND ANALYSIS
- COMMON-SIZE STATEMENTS
- ACTIVITIES
Chapter 2: Balance Sheet
- The Walt Disney Company, News Corp, Time Warner
- INTRODUCTION
- UNDERSTANDING THE WALT DISNEY COMPANY’S BALANCE SHEET
- Current Assets
- Noncurrent Assets
- Current Liabilities
- Noncurrent Liabilities
- INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
- DEBT VERSUS EQUITY
- ANALYZING THE BALANCE SHEET
- Liquidity: Current Ratio
- Solvency: Debt Ratio
- Trend Analysis
- Common-size Balance Sheet
- ACTIVITIES
Chapter 3: Income Statement
- Amazon.com, Sears Holdings, eBay, Starbucks
- INTRODUCTION
- UNDERSTANDING AMAZON.COM’S INCOME STATEMENT
- STEP ONE: REVENUES — COST OF SALES = GROSS PROFIT
- Revenues and Revenue Recognition
- Expenses and the Matching Principle
- STEP TWO: GROSS PROFIT — OPERATING EXPENSES = OPERATING INCOME
- STEP THREE: OPERATING INCOME +/- NONOPERATING REVENUES AND EXPENSES = INCOME BEFORE INCOME TAX
- STEP FOUR: INCOME BEFORE INCOME TAX — PROVISION FOR INCOME TAX = INCOME FROM CONTINUING OPERATIONS
- STEP FIVE: INCOME FROM CONTINUING OPERATIONS +/- NONRECURRING ITEMS = NET INCOME
- ANALYZING THE INCOME STATEMENT
- Return on Sales
- Asset Turnover Ratio
- Return on Assets
- Gross Profit Margin
- Trend Analysis
- Common-Size Analysis
- ACTIVITIES
Chapter 4: Statement of Stockholders’ Equity
- Freeport-McMoRan Copper & Gold
- INTRODUCTION
- STOCKHOLDERS’ EQUITY ON THE BALANCE SHEET
- STATEMENT OF STOCKHOLDERS’ EQUITY
- TREASURY STOCK
- RETAINED EARNINGS
- OTHER COMPREHENSIVE INCOME
- STOCK SPLITS & STOCK DIVIDENDS
- RETURN ON EQUITY
- FINANCIAL LEVERAGE RATIO
- TIMES INTEREST EARNED RATIO
- EARNINGS PER SHARE
- DIVIDEND RATE
- PRICE EARNINGS RATIO
- ACTIVITIES
Chapter 5: Statement of Cash Flows
- Cedar Fair, L.P.
- INTRODUCTION
- THREE CATEGORIES OF CASH FLOWS
- Financing Activities
- Investing Activities
- Operating Activities
- Operating Activities—The Direct Method
- Operating Activities—The Indirect Method
- INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
- ANALYZING THE STATEMENT OF CASH FLOWS
- Free Cash Flow
- Cash Flow Adequacy
- Cash Flow Liquidity
- Quality of Income
- ACTIVITIES
Chapter 6: Specific Accounts
- Research in Motion Limited, Motorola Mobility, Inc.
- INTRODUCTION
- CASH AND CASH EQUIVALENTS
- INVESTMENTS
- ACCOUNTS RECEIVABLE
- Accounts Receivable Turnover
- Accounts Receivable Days
- INVENTORY
- Specific Identification
- First-In, First-Out
- Last-In, First-Out
- International Financial Reporting Standards
- Gross Profit Margin
- Inventory Turnover
- Inventory Days
- PROPERTY, PLANT, AND EQUIPMENT
- Straight-Line Depreciation
- Double-Declining Balance Depreciation
- Comparing Straight-Line with Double-Declining Balance
- Gains and Losses on Sale of PPE
- International Financial Reporting Standards
- CURRENT AND LONG-TERM LIABILITIES
- ACTIVITIES
Chapter 7: The Accounting Cycle
- INTRODUCTION
- THE 10-STEP ACCOUNTING CYCLE
- ANALYZE TRANSACTIONS USING THE ACCOUNTING EQUATION
- PREPARE JOURNAL ENTRIES USING DEBITS AND CREDITS
- Step 1: Analyze and Prepare Transaction Journal Entries (TJEs)
- Step 2: Post TJEs to the Ledger
- Step 3: Prepare the Unadjusted Trial Balance
- Step 4: Prepare Adjusting Journal Entries (AJEs)
- Step 5: Post AJEs to the Ledger
- Step 6: Prepare the Adjusted Trial Balance
- Step 7: Prepare the Financial Statements
- Step 8: Prepare Closing Journal Entries (CJEs)
- Step 9: Post CJEs to the Ledger
- Step 10: Prepare the Post-Closing Trial Balance
- TRANSACTION JOURNAL ENTRIES OF A MERCHANDISE RETAILER
- MORE ADJUSTING JOURNAL ENTRIES
- ACTIVITIES
Chapter 8: Comprehensive Review
- ACTIVITIES
Chapter 9: Capstone Project
- ACTIVITIES
- APPENDIX A–FEATURED CORPORATIONS
- APPENDIX B–RATIOS
- GLOSSARY
- INDEX
About the Authors
- Karen P. Schoenebeck, MBA, CPA, is a Visiting Professor of Accounting at the Stillman School of Business, Seton Hall University, South Orange, New Jersey. She received her MBA from the University of Minnesota and then worked in public accounting while located in Wisconsin, Kansas, and California. Using her practical experience, she brings the real-world relevance of accounting concepts into the classroom. For over ten years she has been developing the financial statement analysis approach presented in this book, challenging both graduate and undergraduate students. She is also president and founder of Two-Paved Roads, a consulting firm, served as Director of the MBA program at Southwestern College in Kansas, presents at national accounting conferences on a regular basis, and has served on the national board of directors for various accounting organizations for over ten years. In addition, Karen is an avid traveler, leading educational tours to Europe and Southeast Asia.
- Mark P. Holtzman, PhD, CPA is Associate Professor of Accounting at the Stillman School of Business, Seton Hall University, South Orange, New Jersey. After receiving a bachelor’s degree in business administration at Hofstra University, he began his accounting career in the New York office of Deloitte & Touche. He later earned a PhD in accounting from The University of Texas at Austin. Dr. Holtzman has published articles in Journal of Accountancy, CPA Journal, Research in Accounting Regulation, Advances in Accounting, Strategic Finance, and Accounting Historian’s Journal. He is a member of the American Accounting Association, the American Institute of Certified Public Accountants, and the Financial Executives Institute. He is also President and founder of a private parochial elementary school for 100 children in Passaic, New Jersey. In his spare time, he enjoys studying Talmud and hiking with his family.
Book Details
- Paperback: 360 pages
- Publisher: Prentice Hall; 6 edition (c2013)
- Language: English
- ISBN-10: 0132746247
- ISBN-13: 978-0132746243
- Product Dimensions: 10.7 x 8.4 x 0.9 inches
- List Price: $47.80