Book Description
A comprehensive, accessible, and innovative approach to a potentially devastating problem.
When a firm's actual earnings fall significantly short of expectations, it's not just the company that suffers. Lenders, equity investors, accountants, auditors, and consultants can also take a hit from this "earnings surprise."
Financial Warnings is designed for one purpose—to make sure that such a shortfall never undermines your financial security. Clearly and systematically, this unique practical guide helps you:
- Understand the many causes of earnings surprises, including fraud, overstated revenues, undervalued liabilities, and many more
- Identify the early warning signals associated with particular earnings surprises, so you can take prompt corrective action
- Prevent earnings surprises from happening in the first place by improving the quality of earnings forecasts
Financial Warnings comes complete with a unique early warning system to put you on the alert for potential trouble, foolproof checklists to help you spot those "yellow flags," a convenient sustainable earnings worksheet to sharpen your earnings forecasts, and plenty of vivid case histories to show you how to anticipate and avoid earnings surprises—not just on paper, but in the real world.
A material difference between a corporation's expected and actual earnings, otherwise known as an earnings surprise, can spell big trouble for lenders and equity investors, to say nothing of the company in question. The failure to anticipate a negative result can threaten a lender's prospects for loan repayment, cause investors to absorb heavy losses, and trigger substantial losses on positions in equity securities.
Dedicated to the principle that "forewarned is forearmed," this book provides accountants and other users of financial statements with the resources needed to avoid these damaging financial discrepancies. Charles Mulford and Eugene Comiskey employ numerous case studies to examine and define these discrepancies and classify earnings surprises according to their major causes: changing economics, fraud, and aggressive application of GAAP. They then examine the results of a survey of bankers and develop a system for rating earnings surprise potential. This Earnings Reversal Score concisely categorizes cautionary signals, such as profitability, liquidity, and management-related early warnings, enabling accountants to recognize problems and take timely corrective measures.
Financial Warnings helps improve the quality of earnings forecasts as well. With the aid of a detailed worksheet and a pair of extended case studies, you'll learn how to locate material nonrecurring items—a major cause of earnings surprises—and determine a firm's sustainable earnings base more accurately. You'll discover how to pinpoint differences in the book and market values of assets and liabilities, which, if undetected, can also result in earnings surprises. In addition, you'll learn the early warning indicators of fraudulent financial reporting, as well as crucial information on the role and responsibility of auditors in detecting such fraud.
An important resource for accountants, executives, CFOs, and company auditors, Financial Warnings is an indispensable guide for investors and others who depend on the accuracy of earnings projections. Even if you have only a tentative understanding of basic accounting issues, this easily accessible presentation will help you develop the knowledge and skills you need to formulate more accurate earnings expectations and avoid the potential disasters caused by earnings surprises.
Customer Reviews:
An Invaluable Book that rings the bell loud and clear.......2004-09-23
Although this book looks outdated but I am sure it sounds loud and clear especially when we are so hot-headed about the Internet Age and Knowledge Management and in most cases have forgotten about what are the Warning Signs we have to watch for particularly when we are opting to invest in a new stock of the new age.The Author is a respected scholar in the field of Finance and I admire every book of his and has spent the money to have every book he has written but most of all, I feel this book is the best. Read it and you will have things to remember everyday.
Gem!.......2002-11-07
Impeccable, a must read for investors, bankers, corporate finance pros. Highly recommended.
Best financial book for your money........2002-04-18
The funny thing is that I have read over 20 books on financial analysis and investing, and I believe that every penny that I have spent on this book was well worth it. The price of the book scared me at first, but where all of the other books that I read fell short, Financial Warnings did not. I was very impressed with the detail to which the book describes each investment scenario. There is no shortage of financial warnings to look out for. In fact, I was shocked to learn of how many warnings lenders and investors should be aware of. Not only has this book taught me about what to avoid, but also about what to buy. Did you know that the CEO or CFO going through a divorce is a financial warning? Did you know that a company entering a new business is a financial warning? Did you know that beating earnings expectations by one penny every quarter is a financial warning when your competitor fell short of expectations? This is a must read. Reading Financial Warnings has changed my life. It is a must read.
Sans pareil!.......2002-01-28
The book is an excellent treatise which provides the readers a systematic framework for figuring out whether the books have been manipulated or if the accounting has been aggressive, through finding out non-recurring items in the income statement and balance sheet. I have tried other books but, they just do not compare with this treatise. The book uses a systematic step-by-step approach which introduces the reader to how to read the fine print. This book should be invaluable to finance and accounting professionals, and also to amateur investors, who would be willing to do a little research into the company books.
For those who not lucky enough to attend Dr. Mulford's class, this book should do a great job.
Listens to all the reviewers.......2000-03-30
To all the people who are skeptical. This book is excellent. I got an email pointing me to this direction and I am glad I did spend the money. It is money well spend.
It teachs you the non recuring items in the financial statements, capitalized assets, capitalized interest, Lifo liquidation etc.
If you find my review satisfying, let me know if you had another good book to read. I know another book, let's trade some info.
Book Description
Recent years have witnessed an increase in the frequency of currency and balance of payments crises in developing countries. More important, the crises have become more virulent, have caused widespread disruption to other developing countries, and have even had repercussions on advanced economies. To predict crises, their causes must be clearly understood. Two competing strands of theories are reviewed in this paper. The first focuses on the consequences of such policies as excessive credit growth in provoking depletion of foreign exchange reserves and making a devaluation inevitable. The second emphasizes the trade-offs between internal and external balance that the policymaker faces in defending a peg.
Download Description
Ever since the European currency crises of 1992-93, the Mexican crisis of 1994-95, and especially the Asian/global crisis of 1997-98, there has been heightened interest in early warning signals of financial crises. This pathbreaking study presents a comprehensive battery of empirical tests on the performance of alternative early warning indicators for emerging-market economies that should prove useful in the construction of a more effective global warning system. Not only are the authors able to draw conclusions about which specific indicators have sent the most reliable early warning signals of currency and banking crises in emerging economies, they also test the out-of-sample performance of the model during the Asian crisis and find that it does a good job of identifying the most vulnerable economies. In addition, they show how the early warning system can be used to construct a "composite" crisis indicator to weigh the importance of alternative channels of cross-country "contagion" of crises, and to generate information on the recovery path from crises.
Customer Reviews:
Assessing Financial Vulnerability: An Early Warning System.......2001-07-02
Save the money! To get a clue on the subject go to the IMF site and download the variety of Kaminsky's and friends papers available. You must go to the references in there, Eichengreen and his friends for instance.
Average customer rating:
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Early Warning Systems for Financial Crisis: Applications to East Asia
Manufacturer: Palgrave Macmillan
ProductGroup: Book
Binding: Hardcover
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ASIN: 1403949387
Release Date: 2005-08-11 |
Book Description
Since the 1997 Asian financial crisis, East Asia has implemented a number of initiatives designed to strengthen monetary and financial cooperation. One such initiative is the ASEAN+3 Information Exchange and Policy Dialogue, which includes development of early warning systems (EWS) for financial crises. This book analyzes the current understanding of the causes of currency and banking crises, describes recent progress in developing and applying EWS models, reviews methodolgical issues, assesses the predictive power of EWS models and also highlights areas where further research is required to make these models more effective tools for policy analysis.
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Early Warning Systems of Financial Crises: Applications to East Asia
Manufacturer: Asian Development Bank
ProductGroup: Book
Binding: Paperback
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ASIN: 9715615147 |
Book Description
In the wake of currency and banking crises in Latin America, Europe, and Asia, these articles provide a regional early warning system prototype designed to anticipate emerging macroeconomic, financial, and corporate sector vulnerabilities. Current theories and practices in the banking world are reviewed and analyzed with an eye toward which economic variables and indicators must be monitored to prevent further crises. The current banking and currency situations in Indonesia, Malaysia, the Philippines, and Thailand are examined and current thinking on how these countries can prevent currency and banking crises is detailed.
Book Description
This detailed report provides timely, systematic data regarding the practice of pro forma reporting from 1998 through January 2002. It evaluates the implications of both self-regulatory and regulatory events including the release of the FEI/NIRI best practices guidelines and the SEC's Dec. 2002 cautionary advice to companies and their advisors. An extensive Appendix provides 78 corporate time-series profiles illustrating the evolution of EBITDA and pro forma reporting.
Book Description
This digital document is an article from Financial Management (UK), published by Chartered Institute of Management Accountants (CIMA) on March 1, 2005. The length of the article is 579 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: Budgeting and reforecasting: last year saw a massive rise in the number of profit warnings. This highlights the issues facing firms using traditional budgeting processes.
Author: Richard Barrett
Publication:
Financial Management (UK) (Magazine/Journal)
Date: March 1, 2005
Publisher: Chartered Institute of Management Accountants (CIMA)
Page: 32(1)
Distributed by Thomson Gale
Book Description
This digital document is an article from Finance & Development, published by International Monetary Fund on June 1, 1999. The length of the article is 2529 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the supplier: The potentially damaging effects of bank failures and banking system crises necessitate the development of basic indicators that can provide early warnings of serious banking problems. These indicators can help countries understand the dynamics of incipient banking crises and thus enable them to manage their financial sectors and their economies better. To shed some light on the matter, five recent episodes of banking system distress were examined. These banking crises occurred in the US southwest (1986-92), the US northeast (1991-92), California (1992-93), Mexico (1994-95) and Colombia (1982-87). One empirical finding, which is consistent for all the regions and countries examined, is that a high ratio of nonperforming loans to total assets signal a bank's distress and both an increase in the profitability that it will subsequently fail and a decrease in its expected survival time.
Citation Details
Title: Developing indicators to provide early warnings of banking crises.(Financial Markets)
Author: Brenda Gonzales-Hermosillo
Publication:
Finance & Development (Magazine/Journal)
Date: June 1, 1999
Publisher: International Monetary Fund
Volume: 36
Issue: 2
Page: 36(4)
Distributed by Thomson Gale
Book Description
This digital document is a journal article from Review of Financial Economics, published by Elsevier in 2007. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
This study shows that contrary to what many managers argue, there is no overreaction to earnings warnings. Our sample consists of 986 firms that had significantly lower fourth-quarter earnings than analysts' forecasts during the period of 1983 to 1998. About 9% of these firms released quantitative earnings information while 6.5% of the firms disclosed qualitative earnings information prior to the formal earnings report dates. We find that although these firms experience significant stock price declines during the warning period, their share prices are still higher than the economic values, calculated using Ohlson's residual income model. Further, long-run operating and stock performance of these firms are not more positive than the performance of firms that do not warn. We also find that investor reaction to both warning and non-warning firms is positively related to the firms' long-run stock and operating performance. These findings support the argument that investors do not overreact to the warnings but base their reaction on anticipated long-term performance of the firms.
Book Description
This digital document is an article from Comparative Economic Studies, published by Thomson Gale on September 1, 2006. The length of the article is 10102 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: From transition crises to macroeconomic stability? Lessons from a crises early warning system for Eastern European and CIS countries.
Author: Kristina Kittelmann
Publication:
Comparative Economic Studies (Magazine/Journal)
Date: September 1, 2006
Publisher: Thomson Gale
Volume: 48
Issue: 3
Page: 410(25)
Distributed by Thomson Gale
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2001 Miller GAAS Guide: Comprehensive Restatement of Standards for Auditing, Attestation, Compilation, and Review (With CD-ROM)
Larry P. Bailey
Manufacturer: Professional Publishing
ProductGroup: Book
Binding: Paperback
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| Qualifying Textbooks - Fall 2007
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ASIN: 0156072351 |
Customer Reviews:
comprehensive info.......2000-06-15
the book is comprehensive, though it is just an update and only changes have been incorp. the layout may be changed.
Book Description
Never before has there been more help to comply with ever-changing complex pharmacy department regulations. In the 2003 Edition of Pharmacy Department Compliance Manual, you get everything you need to stay in compliance. You'll find:
- Legal compliance questions and answers
- Joint Commission survey questions and answers: Get inside guidance from colleagues who were surveyed in the past year
- Hospital accreditation standard analysis: Learn about Joint Commission standards as they apply to the pharmacy department including new requirements issued for 2002
- Reference materials for pharmacy department compliance: All the tools you need to comply with pharmacy-related regulations, laws, and accreditation standards
HCFA and Joint Commission Standards Checklist: An invaluable tool designed to reference similarities and differences between HCFA regulations and Joint Commission accreditation standarsd for hospital compliance.
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A Farm of Our Own: A Spiritual Journey Running a Smallholding
Graham R. Irwin
Manufacturer: Cityscape Books
ProductGroup: Book
Binding: Paperback
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ASIN: 0953333108 |
Book Description
A Farm of Our Own is an honest and intimate account of the attempts of a "city-boy" and his partner at running a small farm as a hobby. As its subtitle suggests, it also describes some of the lessons learned during that ten-year once-in-a-lifetime experience. It is a journey which takes the author through some of the most harrowing experiences of his life--such as when his pet 'house' cow is diagnosed as having mad cow disease; some of the most amusing--like the antics of a sex-mad drake and ram; some of the most frustrating--such as having to burn two acres of soggy grass that should have been hay; and some of the most satisfying and rewarding. In its own way, the book aims to build bridges and promote understanding between city dwellers and country folk.
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- Fundamental Accounting Principles w/2003 Krispy Kreme AR, TTCD, NetTutor, OLC w/PW
- Governmental and Nonprofit Accounting: Theory and Practice (8th Edition) (Charles T Horngren Series in Accounting)
- History: Fiction or Science? (Chronology, No. 1)
- Integrated Risk Management: Techniques and Strategies for Managing Corporate Risk
- Intermediate Accounting, Chapters 1-14, Problem Solving Survival Guide
- Intermediate Accounting, Volume 1
- Investing in Pension Funds and Endowments : Tools and Guidelines for the New Independent Fiduciary
- Judgment and Decision-Making Research in Accounting and Auditing (Cambridge Series on Judgment and Decision Making)
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![Do investors overreact to earnings warnings? [An article from: Review of Financial Economics]](http://ec1.images-amazon.com/images/I/21z7yz8jmsL.jpg)
