| The book covers in detail important issues in financial reporting and offers comprehensive material on analysis of financial statements and accounting-based valuation. The latest 9th edition builds on the foundations established by the earlier authors, Clyde Stickney and Paul Brown, and is an indication of its popularity and relevance to users that are interested in accounting. I need to stress here that the first edition of the book has appeared in 1990, while the previous edition has taken place in 2015. The latest edition is a joint effort by three accomplished academics in U.S., James M. Wahlen, the James R. Hodge Chair, Professor of Accounting and Chair of the Accounting Department, Stephen P. Baginski, the Herbert E. Miller Chair in Financial Accounting at the University of Georgia’s J.M. Tull School of Accounting and Mark T. Bradshaw, Professor of Accounting, Chair of the Department, and William S. McKiernan ‘78 Family Faculty Fellow at the Carroll School of Management of Boston College. There exist a wide variety of classic textbooks in the same field, such as Palepu and Heally (2013), Penman (2013), Subramanyam (2014), constituting a challenge for prospective readers to select the most appropriate text. Each of them differs with respect to the emphases given on several necessary steps of financial statement analysis. In particular, the framework in this book for an effective financial statement analysis consists of six interrelated sequential steps as follows: i) understanding industry economics, ii) identifying corporate strategy, iii) assessing accounting quality, iv) assessing profitability and risk, v) forecasting profitability and risk and vi) valuing stocks. Wahlen, Baginski, and Bradshaw in the introductory version, claim that “the premise of this book is that you learn financial statement analysis most effectively by performing the analysis on actual companies” (p. v). In this line, each of the abovementioned steps of analysis is demonstrated and discussed using the financial statements of Starbucks. It is a well-organized and structured textbook for financial statement analysis modules in undergraduate and/or graduate programs in accounting and finance. It could be also used by MBA students in introductory financial accounting courses. Further, the book is a helpful reference for analysts in valuing firms and investment managers in making the appropriate top-down decisions on international asset allocation. It is worth noting here, that the text is written in an open – learning style, making it accessible to readers that do not have a strong accounting background. |