Table of Content


Introduction To Investing And Valuation

  •  Investment Style
  •  Investment Style and Fundamental
  •  Investors, Firms Securities, and Capital Markets
  • The Business of Analysis
  • The Analysis of Business
  • Choosing a Valuation Technology


Introduction To The Financial Statements    

  • The Form of the Financial Statements
  • Measurement in the Financial Statements


How Financial Statements Are Used In Valuation

  • Multiple Analysis 
  • Asset-Based Valuation
  • The Architecture of Fundamental Analysis


Cash and Accrual Accounting, And Discounted Cash Flow Valuation

  • The Dividend Discounts Model
  • The Discounted Cash Flow Model
  • Reverse Engineering Converting a Price to a Forecast
  • Simple Valuation Models
  • The Statement of Cash Flows
  • Cash Flow, Earnings, and Accrual Accounting Earnings and Cash Flows


Pricing Book Values

  • The Price-to Book Ratio Concept
  • Prototype Valuations
  • A Model for Anchoring Value on Book Value
  • Applying the Model to Equities
  • Applying the Model to Projects and Strategies
  • Features of the Residual Earnings Model
  • Reverse Engineering the Model foe Active Investing


Pricing Earnings

  • The Concept behind the Price-Earnings Ratio
  • Prototype Valuation
  • A Model for Anchoring Value on Earnings
  • Applying the Model to Equities
  • Features of the Abnormal Earnings Growth Model
  • Reverse Engineering the Model for Active Investing


Business Activities and Financial Statements

  • The Cash Flows
  • All Stocks and Flows
  • Accounting Relations that Govern Reformulated Statements


The Analysis Of The Statement Of Shareholder’s Equity

  • Reformulating the Statement of Owners' Equity
  • Dirty-Surplus Accounting
  • Ratio Analysis
  • Hidden Dirty Surplus


The Analysis Of The Balance Sheet And Income Statement

  • Reformulation of the Balance Sheet
  • Reformulation of Income Statement
  • Comparative Analysis of the Balance Sheet
  • Ratio Analysis


The Analysis Of The Cash Flow Statement

  • The Calculation of Free Cash Flow
  • GAAP Statement of Cash Flows and Reformulated Cash Flow statements
  • Cash Flow from Operations


The Analysis of Profitability

  • Cutting to the Core of the Operations
  • Distinguishing Financing and Operating Activities
  • Drivers of Operating Profitability
  • Profit Margin Drivers


The Analysis of Growth and Sustainable Earnings

  • What Is Growth?
  • The Analysis of Changes in Profitability
  •  The Analysis of Growth in Shareholders' Equity
  •  Growth Sustainable Earnings and the Evaluation of P/B Ratios and P/E Ratios


The Value of Operations 

  • A Modification to Residual Earrings Forecasting Residual Operating Income
  • Modification to Abnormal Growth in Operating Income
  • The Cost of Capital and Valuation
  • Financing Risk and Return and the Valuation of Equity
  • Mark-to-Market Accounting


Simple Forecasting and Simple Valuation

  • Simple Forecasts and Simple Valuations form Financial Statements
  • Adding Speculation to Financial Statement Information
  • The Applicability of Simple Valuations
  • Simple Valuations with Short-Term
  • Simple Valuation as an Analysis Tool 


Full-Information Forecasting, Valuation, And Business Strategy Analysis

  • Financial Statement Analysis
  • Full- Information Forecasting and Pro Forma Analysis
  • Value Generated in Share Transactions
  • Financial Statement Indicators and Red Flags
  • Business Strategy Analysis and Pro Forma Analysis


Creating Accounting Value and Economic Value

  • Value Creation and the Creation of Residual Earnings
  • Accounting Methods, P/B Ratios, P/E Ratios, and the Valuation of the Going Concern
  • Hidden Reserves and the Creation of Earnings
  • Conservative and Liberal Accounting
  • Accounting Methods and the Forecast Horizon 


Analysis Of The Quality Of Financial Statements

  • What is Accounting Quality?
  • Detecting Income Shifting
  • Detecting Transaction Manipulation


The Analysis Of Equity Risk And The Cost Of Capital

  • The Nature of Risk
  • Fundamental Risk
  • Value-At-Risk Profiling
  • Fundamental Betas
  • Price Risk


The Analysis Of Credit Risk    

  • Ratio Analysis for Credit Evaluation
  • Forecasting and Credit Analysis
  • Liquidity Planning and Financial Strategy

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