Earnings Magic and the Unbalance Sheet: The Search for Financial Reality
Gary Giroux, Texas A&M Univ.
Wouldn't you like to know as much as you could about a company before you invest in it? Financial information on companies is readily available, but not necessarily easy to interpret.
With shrewd tips and state-of-the-art analytical tools, Earnings Magic and the Unbalance Sheet arms you with the key strategies and principles to help you evaluate whether a company's bottom line is headed toward excellence or financial abuse. This eye-opening guide expertly walks you through the tangle of potentially inflated earnings and misleading accounting disclosures to determine a company's financial reality.
From the Inside Flap
How can an investor protect his or her stock portfolio? How can an analyst make accurate projections on a company's financial health? Earnings Magic and the Unbalance Sheet: The Search for Financial Reality guides business professionals including corporate financial analysts, practicing accountants, credit analysts, institutional and individual investors, money managers, and commercial bank lenders through the maze of potentially misleading earnings and accounting disclosures to search for financial reality.
With keen insight and state-of-the-art analytical tools, Earnings Magic and the Unbalance Sheet deftly guides the wise investor or analyst on how to best assess corporate financial status and make better financial decisions by recognizing companies with poor and deceptive disclosure practices. This eye-opening book arms the reader with an earnings magic detection strategy that reveals how—and why—corporations "fudge" their numbers and explores the factors that point to potentially low earnings.
Author Gary Giroux pulls back the curtain to show how big companies—even in the shadow of changes since the Enron and WorldCom financial fiascos and congressional hearings leading to the Sarbanes-Oxley Act of 2002—still use dubious financial maneuvers to manipulate the bottom line and overstate revenue. For the investor who wants to avoid financial losses—and which investor doesn't?—this is required reading on the best way to research and read financial reports. Earnings Magic and the Unbalance Sheet: The Search for Financial Reality shows you how to:
- Establish a basic overview strategy
- Thoroughly review the firm's prevailing financial environment
- Know the background essential for in-depth analysis including corporate governance, the regulatory environment, the tools available for analysis, and the incentives of major players
- Make the most of sources of financial data including a company's annual and quarterly reports and proxy statement
- Access public information on companies via a wealth of Internet tools
Financial deceptions, such as inflated revenues and hidden expenses that are difficult to detect, still takes place in corporations despite new regulations designed to make financial information more reliable and oversight more extensive. Earnings Magic and the Unbalance Sheet equips readers to identify the early warning signs of a company's problems, determine its financial transparency, and estimate its financial reality.
Praise for Earnings Magic and the Unbalance Sheet
"Gary Giroux brings a breezy, entertaining writing style that really helps the reader untangle arcane accounting practices, including stock options, pensions, off-balance sheet items, and the rest of his 'dirty thirty.'"
—Edward Swanson, Durst Chair and Professor of Accounting, Texas A&M University
"Earnings Magic and the Unbalance Sheet provides equity investors with clear explanations of today's financial environment together with specific analysis tools to assess the quality of earnings. Gary Giroux provides a valuable and easy-to-use scoring system where investors assign grades to help them in their investment decisions. Earnings Magic is a must-read for any investor in the Dow Jones Industrial Average (Dow 30). Giroux thoroughly analyzes some of the biggest and best known companies."
—Andrew McLelland, Assistant Professor of Accounting, Auburn University
Scrutinising the balance sheet
Malaysian Business, Dec 1, 2006 by Reviewed by Cynthia Ann Peterson
INTERPRETING the maze of numbers in corporate balance sheets is vital to make sound investment decisions. Looking beyond the numbers to recognise what this book calls `poor and deceptive disclosure practices' is necessary to make better financial decisions.
Earnings Magic and the Unbalance Sheet: The Search for Financial Reality dissects the accounting practices in the US, but local readers can still glean useful information on interpreting the numbers.
Author Gary Giroux explains the oft-complex art of deciphering a balance sheet in clear, concise language, in a narrative style readers will find easy to follow. He outlines how reporting financials have changed since the collapse of Enron and other earnings misstatement scandals. He explains the range of accounting alternatives available, which may be used opportunistically to meet expectations. (for full review)
Reviews for Earnings Magic and the Unbalance Sheet:
Gary Giroux's Books
Wouldn't you like to know as much as you could about a company before you invest in it?