An Overview of Financial Statement Analysis: The Mechanics Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

September 20, 2000, Jonathan Weil, Wall Street Journal reporter in Dallas, Texas, published an article questioning the profitability and accounting Enron Corporation. It based its article on the study of Enron's financial statements and interviews with employees of Financial Accounting Standards »(FASB), accounting professors, financial analysts, and others. "It took me a while to figure out all you need to see it, probably took a good month or so. There was a lot of noise in the financial statements." His play was read by James Chanos, founder and president of Kynikos Associates, a firm that specializes in short sales. How could Vail and Chanos figure Enron, when so many others were pushing up the price of stocks? How did they know to do this analysis? Only answer is simple: through the study, application and more applications. You can not develop financial expertise night. Our aim in this paper, however, present a very basic structure for the financial analysis, which will help you move toward that goal. We focus on what to look for in the financial statements, how to do a basic analysis of the relationship that financial forecasting entails, and how financial analysts use these statements in the assessment. We consciously focus on the mechanistic nature of the financial analysis, because these tools are the basic building blocks common to the analysis of most firms. Without an understanding of the basic structure of the unique challenges faced by the company will be hard to interpret.
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by Brandt Allen, Paul Simko Source: Darden School of Business 30 pages. Publication Date: August 23, 2007. Prod. #: UV0911-PDF-ENG