This thoroughly revised fifth edition of A Manager’s Guide to Financial Analysis - the classic knowledge-builder and career-booster-is a concise and completely comprehensive self-paced learning tool. Chapter by chapter, topic by topic, it helps you build your skills and expertise in a practical, logical manner...so you not only grasp the new information, but retain it.

You’ll learn about short-term management issues like ratio analysis, current asset management, and the integration of working capital components.In addition, A Manager’s Guide to Financial Analysis teaches you about long-term investment decisions, such as the evaluation of capital investment proposals and merges and acquisitions.

And you’ll find all-new chapters on how to make needed adjustments to financial statements- taking into account current values, off-balance-sheet financing, and unrecognized items-and how to determine your company’s optimal capital structure and debt policy.

You’ll learn how to:

• Describe the three main financial management decisions you need to make
• Perform horizontal analysis and vertical analysis
• Explain the interrelationship of profitability, leverage, activity, and liquidity ratios
• Apply intra-company, trend, and industry analysis in a specific situation
• Adjust the balance sheets for sales receivables
• Analyze three cash disbursement techniques
• Calculate the present values of future cash flows and annuities
• Determine the net present values and internal rates of return
• Compute the financial leverage index
• Measure the financial impact of a merger
• Assess the importance of earnings per share adjustments, and much more

Course Objective:

Analyze financial statements accurately, Use various ratios, trends, and calculations to measure actual financial positions.

As one course among many offered in the American Management Association’s curriculum, A Manager’s Guide to Financial Analysis, Fifth Edition is intended for managers who have a basic understanding of accounting and of the structure of financial statements. It covers the basics of financial analysis: financial statement analysis, ratio analysis, assessment of current asset management and capital investment proposals, capital structure, and analysis in support of mergers and acquisitions.

A traditional, basic course for financial managers, A Manager’s Guide to Financial Analysis is designed to help users of financial statements perform more sophisticated analysis and make better decisions based on the information available in those statements. With today’s heightened merger and acquisition activity, financial managers must understand how to read and interpret financial statements and to judge how business decisions will affect those statements and outsiders’ judgments regarding their company.

Steven D. Grossman, Associate Professor of Accounting a t Texas A&M University, teaches in the areas of financial accounting and analysis and cost accounting (which includes capital investment analysis). He has written articles that have appeared in such journals as The Accounting Review, Journal of Accountancy, CPA Journal, Financial Executive, Management Accounting, and The Tax Executive. In addition, he has published several books in accounting. Grossman holds B.S. and M.A. degrees from Northeastern University and a Ph.D. from Tufts University.

The publisher would like to thank the following people for their review of the manuscript of this course: Emery Trahan, Associate Professor, Finance and Insurance Group, Northeastern University, Boston, Massachusetts, and David Filipek, Assistant Professor of Accounting, Rhode Island College, Providence, Rhode Island.