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Understanding Financial Statements, 12th edition

Published by Pearson (January 28, 2023) © 2024

  • Lyn M. Fraser
  • Aileen Ormiston

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For financial accounting courses.

An analytical approach to understanding business financial statements

Understanding Financial Statements provides students with the conceptual background and analytical tools to understand and interpret business financial statements. The text helps boost readers' confidence in analyzing these documents as well as understanding a firm's historical, current, and prospective financial condition and performance.

The 12th Edition continues its superior readability, concise coverage, and accessibility. It features new cases and enhanced learning tools to help students make sense of complex financial info, so that they can make sound, profitable business decisions.

Hallmark features of this title

  • Learning Objectives indicate what students should know after reading the chapter.
  • Problems related to writing skills, internet, research, and intel offer students the opportunity to analyze a real, high-tech company throughout the text.
  • End-of-chapter comprehensive analysis problems demonstrate how to complete a financial statement analysis.
  • End-of-chapter self-tests with solutions help students monitor their progress.
  • Appendices provide useful information on earnings quality and the analysis of segmental data.
  • A Glossary helps students familiarize themselves with key terms used in the text.

New and updated features of this title

  • NEW: Coverage of recent changes in accounting and reporting standards helps students stay current with today's accounting principles.
  • NEW: Content relevant to the CPA Evolution Model Curriculum highlights the skills newly licensed CPAs need in the current practice environment. Topics and modules help students work through the Accounting and Data Analytics Core (Part I of the Curriculum). They also guide them through the CPA Evolution Business Analysis and Reporting (BAR) Discipline (Part II of the Curriculum).
  • NEW: CPA Evolution Model Curriculum Cases in every chapter are based on real companies and include sample analysis to help strengthen students' critical-thinking skills.
  • NEW and UPDATED: Examples, study questions, and problems illustrate accounting concepts and the current environment.
  1. Financial Statements: An Overview
  2. The Balance Sheet
  3. Income Statement, Comprehensive Income, and Statement of Stockholders' Equity
  4. Statement of Cash Flows
  5. The Analysis of Financial Statements

APPENDICES

  1. Summary of Financial Ratios
  2. Solutions to Self-Tests
  3. Glossary

About our authors

Lyn M. Fraser has taught undergraduate and graduate classes in financial statement analysis at Texas A&M University and has conducted numerous seminars on the subject for executive development and continuing education courses. A Certified Public Accountant, she is the author of articles in the Journal of Accountancy, the Journal of Commercial Bank Lending, the Magazine of Bank Administration, and the Journal of Business Strategies. She has been recognized for Distinguished Achievement in Teaching by the Former Students Association at Texas A&M University and is a member of Phi Beta Kappa. Lyn's publications also include a mystery novel, Debits and Credits (Mainly Murder Press).

Aileen Ormiston has taught MBA, honors, and online courses in the Accounting Department in the W.P. Carey School of Business at Arizona State University. She received her bachelor's degree in accounting from Michigan State University and a master's degree in finance from Texas A&M University. Prior to embarking on her teaching career, Aileen worked in cost accounting and as an auditor in public accounting. She taught accounting and general business courses for 30 years at Mesa Community College, one of 13 universities and colleges that received a grant from the Accounting Education Change Commission. As a result of her pioneering work in changing accounting education, she was the recipient of the “Innovator of the Year” award from the League for Innovation in the Community College. For her service to honors students, Aileen was named a Phi Theta Kappa mentor.

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