Reviews (6)

Best book on the subject
I consistently buy this book to distribute to participants in my company's credit training seminars. I have used the previous edition and this newest edition, both of which are very informative and easy to read. To the author... Great Job!

Filled some gaps for me
Though rudimentary, this book filled some gaps for me left by more advanced texts, including some definitions that I was fuzzy on, and enlightened me as to why some things are on financial statements in the form they're in, since I don't have a business education background.

The CD contains the text, which is handy on a laptop, but marred by having the text superimposed on a busy patterned background that has some kind of periodic highlights that are particularly annoying (the current generation of magazine, book and web site designers can't seem to grasp that the point of text is to be read, and that stuff that looks nifty on the computer screen may be darn near impossible to read in print; busy photo backgrounds, light text on dark backgrounds etc. belong ONLY in ads, where no one is expected to read the text anyway.)

Also, the spreadsheets would have been more useful if incorporated in groups into workbooks instead of individual ones. You can't readily get numbers from one to another. And the disk titles are of the "sheet23.xls" variety, not helpful for finding the one you want, so you have to either have the book listing handy or access them strictly from the CD PDF file text.

Being used to technical book web sites that contain errata, new material, suggestions from users, etc., I was disappointed to find nothing new there. And the list of web links, as usual in this fast-changing world, contains a number of missing links. I would have appreciated a good old fashioned bibliography in addition to the links, because you can usually find out of print books through a library, used dealers on the web, and most really important books and texts have current editions.

Please Note
I am the author. I would like to point out that the reviews that appear here, which are dated prior to May 2002, are for the previous edition. In this new Third Edition, I have worked hard to take this top-selling, clearly written book, and add content in many areas to provide more depth to the book. There are six new chapters covering tax concepts, capital structure, business plans, working capital and banking relationshsips, accountability and control, and personal finances. In addition many other chapters have been siginficantly modified and or supplemented with new information. I hope you enjoy my book.

Good general introduction to F&A
If you want a very basic introduction into the world of finance and accounting, this book may be for you. I was a little disappointed at the lack of depth, though.

Weak
Overall it was ok, but I feel the author missed some very important highlights. ... Read more

Book Description

Recent events have turned the spotlight on the issue of corporate accountability -- especially when it comes to protecting shareholdervalue. In the modern corporation, non-owners commonly manage day-to-day operations, and their decisions have a direct impact on the company'soverall value. But what can management do to positively impact share price and protect shareholder investment?

A Blueprint for Corporate Governance is unique in that it addresses shareholder value from a managerial perspective. This important book coversall essential corporate governance issues from this angle, providing detailed information and insights on:

* Contemporary asset pricing models, and how they can help managers determine optimal returns on shareholder funds* Financial structures and dividend policies designed to advance shareholder interests* Methods for executives, managers and boards of directors to work as one to enhance and increase shareholder value. ... Read more

Book Description

How to cut through the public relations jargon and analyze a company's financial health and future prospects as it's spelled out in an annual report. Sound advice for non-expert investors in the stock market. New topics covered and explained in this edition include annual reports on the Internet, materiality, and financial derivatives. Titles in the easy-to-understand Business Keys series are directed at consumers and non-professionals, with advice on saving, investing, protecting assets, and increasing wealth through prudent money management. The books define terms, cut through business jargon, speak in plain language, and take the mystery out of business. ... Read more

Reviews (4)

Succinct and Informative
This book is very succinct and the explanations for each accounting concepts are very easy to understand and easy to remember. The "Red Flags" after each concept are very useful in pointing out all the possible problems that may arise. While the strengths of this book is his conciseness, it does require you to have some basic accounting background. Otherwise, some of the explanations may seem confusing. Having said that, if i am reading an annual report, I would definitely want to have this book beside me. Happy reading!

Great Little Book To Help You Understand Financial Reports



"Keys To Reading An Annual Report" by George Thomas Friedlob and Ralph E. Welton is a wonderful, little book for all investors. Each of the fifty, three-or-four-page sections covers a key concept that investors should understand when reading a public company's annual report and other financial statements.

"Keys To Reading An Annual Report" is no substitute for a complete text about financial statement analysis, such as "The Analysis And Use of Financial Statements," but "Keys To Reading An Annual Report" is an excellent first read for new investors who are learning to understand financial statements. And, experienced readers of annual reports will probably find this book a useful review.

Some of the fifty key topics covered include:

--SEC Forms 10-K, 10-Q, and the 8-K
--Current Assets
--Cash and Receivables
--Cost of Goods Sold and Inventories
--Property, Plant, and Equipment
--Depreciation
--Intangibles and Other Assets
--Depletion and Amortization
--Current Liabilities
--Bonds and Amortization
--Owner's Equity
--Classes of Stock
--Treasury Stock
--Discontinued Operations
--Ratio Analysis
--Taxes and Tax Deferrals

Many of the topics "Red Flag" things to which investors should pay special attention. For example, the chapter about Depreciation Red Flags: "The basis for long-lived asset valuation is historical cost. Because depreciation does not measure actual decline in value, the net book value of a long-lived asset (historical cost - accumulated depreciation) is not a good measure of the cost of replacing the asset. Neither is net book value a good measure of what the asset would bring if sold." (i.e., depreciation expense is a way of expensing the long-lived asset. And, the balance sheet only lists the so-called "unexpired cost.")

The red flag also discusses the difficulty in comparing depreciation across different companies because of the different ways depreciation may be computed.

The section about Treasury Stock tells us: "Stock Issued by a company may later be reacquired by the company. In some cases, the company may retire or cancel this stock. When reacquired stock is not retired or canceled, it is referred to as treasury stock." (there is a nice glossary at the end of the book.).

Friedlob and Welton point out that treasury stock is not an asset. "A company cannot create an asset by holding stock in itself."

However, because the reacquired stock may have been reacquired at a different price than it was originally issued, the wealth within the company can change in such a treasury stock transaction. For example, suppose stock is issued for $20 per share, but reacquired for $2 per share (it's an internet company!), then, somehow, the company has taken in $18 per share on the transaction. How is this accounted for in the financial statements?

Friedlob and Welton explain: "Just as treasury stock is not an asset, a loss or gain cannot result from treasury stock transactions. 'Things' happen that you and I would call a 'loss' (reacquiring treasury stock for $20 per share and later reissuing it for $12) or a 'gain' (reacquiring treasury stock for $30 per share and later reissuing it for $40). But it is illegal for a company to produce a gain or loss transacting in its own stock. When total stockholder's equity is decreased by treasury stock transactions (a loss), the decrease is generally taken directly from retained earnings. No loss is taken... When total stockholder's equity is increased by treasury stock transactions (a gain), the increase is recorded as a separate source of capital called Paid-In Capital from Treasury Stock Transactions."

So, by reading a little, two-page section about treasury stock in Keys To Reading An Annual Report, you probably now know more than 99% of all investors know about treasury stock!

"...If you are new to investing, you might also want to pick up a copy of Barron's "Keys To Investing In Common Stocks," which is an excellent first read for investors.

Peter Hupalo, Author of "Becoming An Investor"

Keys to Reading an Annual Report
This small manual concisely and succinctly presents the major elements of financial statements in easy to read, line-by-line format. It is not only ideal for the average investor without an accounting background, but also for the accountant who needs to explain financial statement concepts and presentations to others. Its examples are easy to relate to and quite illustrative. I regret this wasn't available when I tried to decipher "Accounting 101".

A CUT ABOVE ONE OF MY FINANCE COURSES
Even thought this book is five years old, the information still applies to the year 2000. As a person who now works iin finance, I know that detail is extremely important. This book certainly does its job by being very detail oriented. I graduated froom a very pretigious business school in which finance is actually the best subject taught, and I have to admit I think this little guide puts many pricey finance/accounting and finance professors to shame. It's also probably a good little guide for kids as well, to give them a headstart in the world of finance. ... Read more

Book Description

Managing Risk in Organizations offers a proven framework for handling risks across all types of organizations. In this comprehensive resource, David Frame— a leading expert in risk management— examines the risks routinely encountered in business, offers prescriptions to assess the effects of various risks, and shows how to develop effective strategies to cope with risks. In addition, the book is filled with practical tools and techniques used by professional risk practitioners that can be readily applied by project managers, financial managers, and any manager or consultant who deals with risk within an organization. Managing Risk in Organizations is filled with illustrative case studies and

• Outlines the various types of riskpure, operational, project, technical, business, and political
• Reveals what risk management can and cannot accomplish
• Shows how to organize risk management efforts to conduct risk assessments, manage crises, and recover from disasters
• Includes a systematic risk management processrisk management planning, risk identification, qualitative impact analysis, quantitative impact analysis, risk response planning, and monitoring control
• Provides quantitative and qualitative tools to identify and handle risks

... Read more

Reviews (2)

only for students
You shall be interested in the book only if you are just beginning to learn about a bank analysis and management. Be careful!!!

Strictly for beginners
All potential readers be warned: this book is only suitable for very early beginners, people starting from absolute scratch on the topic. It is very clear and concise (I read it in a single afternoon) but you are not going to find in-depth discussion of anything. Also I'd like to make it clear that the book talks about ALM in banks only (no insurance companies, pension funds, endowments etc).

So, if you are very ignorant but curious, this book is for you (possibly buy it used, it's not cheap). If you already know the basics of ALM, my advice is to buy something else. ... Read more

Book Description

Move Beyond the Routine to the Innovative

From processing accounts payable and closing the books in a timely fashion to making recommendations for improvements that will enhance a company's overall performance, corporate controllers and financial managers have a wide range of responsibilities. But these tasks also represent a wide area of opportunity. The controller who has developed skills beyond that of routine accounting management to include innovative financial analysis can become a highly valued member of a company's infrastructure. This opens the door to a variety of promotions and high-level interactions with other departments. Financial Analysis: A Controller's Guide is designed to help the controller acquire and apply top-notch financial analysis skills. In addition to covering the traditional aspects of the field, here are thorough analyses of such advanced topics as:
* Evaluating acquisition targets
* Increasing shareholder value
* Determining the break-even point
* Forecasting future business conditions
* Using sample analysis reports
* Determining the cost of capital
* Analyzing risk

Here is hard-to-find coverage of management performance review systems, process cycle analysis techniques, and capacity analysis methods-plus checklists, advice, and detailed examples and comprehensive explanations of many internal areas. This guide will be an indispensable tool for the controller who is interested in enhancing career opportunities in the field.

Benefit Your Company-and Your Career

As a corporate controller, financial manager, or treasurer, companies rely on your judgment in order to run smoothly and to grow both strategically and financially. But when it comes to your own personal career growth, moving past the often mundane functions of the job requires sharpened financial analysis skills. Financial Analysis: A Controller's Guide addresses both the classical aspects of the field, including capital purchase and acquisition target analysis, as well as comprehensive information on the analysis of many internal areas. Here is invaluable guidance regarding:
* How to improve a corporation's overall performance
* When to buy assets
* How to increase shareholder value
* How to recognize indicators of specific underlying problems
* How to use financial analysis reports, including electronic spreadsheets
* How to determine future business conditions . . . and much more, to help raise your visibility within the company, and earn the recognition, promotions, and career success you deserve. ... Read more

Reviews (6)

The Best Textbook I Ever Read!
I purchased the book as part of my CPA Continuing Education credit program. I was pleasantly surprised. Relevant information with sufficient explanations in clear and concise language. A definite must read and must keep as reference material for any controller or financial analyst.

Too simple for the real world
This book does not provide any information that could not be found in a college level textbook. The assumptions and examples provided in the book are over simplified. If you are anything higher than a junior accountant I would suggest you purchase something else. Calling this book a "Controller's Guide" is just plain wrong.

A MUST HAVE...PRACTICAL, EASY TO USE; INSIGHTFUL!
After over 10 years in the field serving as a Controller, Business Manager, and Consultant, finally a practitioner's book that hits the target. Given the vast topic, Bragg nails the critical issues...gets you in & out of each topic quickly and provides an array of useful tools for analysis, presentation, and discussion. The KISS principle at work! Other books may cover more detail, present more elaborate formulas and in general overwhelm the reader. Bragg doesn't. You'll find his summaries quite helpful: Commonly Used Ratios; Symptoms & Solutions; and Exhibit 6.11 Recommended Analyses by Type of Acquisition, for example. Full of practical, hands-on topic reviews, examples, and analytical thinking. Numerous Exhibits showing practical layouts for presenting information...have saved me time & eliminated the need to reinvent the wheel. A must have for my reference tools...and could have eliminated several books in my MBA. Do what's in this book & do it well and you'll build a solid reputation for you and your team. I liked this book so much that I added Bragg's books "Sales & Operations For Your Small Business" and "Accounting & Finance For Your Small Business" to my tools, too...and have been equally pleased.

Great Guide for a Controller
This is the only guide I am aware of that is specifically tailored to the needs of the practicing controller. The chapters on breakeven analysis, capacity utilization, and (especially) the use of an electronic spreadsheet are perfect. I find myself taking this book off the shelf for reference purposes at least once a week. Highly recommended.

Too simple, too young & too naive
Too simple assumption on work of a controller.

Too young to call himself a 'controller' if he works like the book quoted

Too naive if you think the real world would be like that. ... Read more

Book Description

A complete explanation of the issues that determine private firm value
Principles of Private Firm Valuation combines recent academic research and practical real-world experience to help readers better understand the multitude of factors that determine private firm value. For the financial professional serving private firms-who are increasingly being called upon to give advice on issues related to firm valuation and deal structure-this comprehensive guide discusses critical topics, including how firms create value and how to measure it, valuing control, determining the size of the marketability discount, creating transparency and the implications for value, the value of tax pass-through entities versus a C corporation, determining transaction value, and the valuation implications of FASB 141 (purchase price accounting) and 142 (goodwill impairment).
Dr. Stanley J. Feldman (Lowell, MA) is Associate Professor of Finance at Bentley College, where he currently teaches courses in corporate finance with a focus on business valuation and business strategy at both the graduate and undergraduate levels. He is a member of the FASB Valuation Resource Group and is Chairman and cofounder of Axiom Valuation Solutions. ... Read more

Book Description

A one-stop resource for both beginners and experienced practitioners

Comprehensive financial valuation requires the mastery of a variety of functions to be employed in a variety of valuation situations. The Financial Valuation Workbook applies valuation theory to real-world business environments, providing a detailed case study, models, and exercises that can cut the novice’s learning curve in half and assist experienced practitioners in better organizing the valuation process.

The Workbook follows the valuation engagement format, organized by standard, easily identifiable sections that allow for easy reference by all professionals. This accessible, authoritative text:

• Covers step by step the intricacies of preparing a credible valuation
• Guides the less experienced valuation practitioner through concepts and applications
• Includes a valuation process flowchart
• Presents an organized resource of checklists, information requests, and other tools to assist valuation practitioners in organizing their engagements

Authors James Hitchner and Michael Mard also include a chapter of helpful "ValTips" submitted by twenty-five leading valuation experts. CPAs, attorneys, appraisers, merger and acquisition professionals, and MBA candidates will find the Financial Valuation Workbook to be an essential resource. ... Read more

Book Description

"A must-read for any investor serious about knowing what they own. With the help of some of the best financial detectives, Michelle Leder provides a roadmap for delving beneath the surface –– where most investors dare not tread."
–Herb Greenberg, Columnist, TheStreet.com and Fortune magazine

"Obfuscators beware! Michelle Leder has cracked the code. In this invaluable guide to combing the footnotes of financial statements for indicators of accounting tricks and attempts to hide the bad news needles in a haystack of numbers. This is a clear, sensible, and, above all, practical guide that will be indispensable for anyone who invests in, does business with, or works for a corporation."
–Nell Minow, Editor, The Corporate Library

"Too many companies would prefer that you not read the footnotes," observes former SEC chairman Arthur Levitt. "That should be incentive enough to delve into them." In fact, not only do companies prefer you ignore the details they are required to report–the pesky particulars on exactly how they account for those whopping earnings–they take calculated steps to make this information as hard as possible to understand. But for those who know how to look, the facts that predict a company’s true prospects are usually hidden in plain sight.

Financial Fine Print gives you the tools you need to break down annual reports and SEC filings, make sense of the deliberately cryptic language of footnotes, and get the real goods on a potential investment.

To make money in today’s tough market, investors have to make deliberate, well-researched choices. To do this requires not only having the right information, but also knowing how to decode it. With their obscuring tactics, companies won’t help you any. So be advised: those who would help themselves–and expect to profit–should get down to the nitty-gritty of Financial Fine Print. ... Read more

Reviews (14)

A classic update to Quality of Earnings!
If you're the type of investor who loved Quality of Earnings, this is a must read! It's smart and sophisticated, yet easily understandable for even novice investors. By explaining in vivid detail the different "red flags" that investors need to be wary of, the author, who writes from the point-of-view of the average investor, makes her points clearly and concisely.

What's particularly charming about this book, when compared with some of the other accounting-related books out there, is that you don't have to be a CPA or have an MBA or some other advanced degree to understand this book. Yet, the book is sophisticated enough to also be appealing to people who do.

I can't help but wonder now, as proxy and annual report season gets underway, how many investors would find this book incredibly useful. The chapter on related party transactions, which is cleverly titled All in the Family, is worth the book's price alone. For any investor who picks or invests in individual stocks, this is truly a must read!

A polygraph for financial statements and corporate reports
In the aftermath of the corporate accounting scandals, it's hard to know what companies to trust enough to put your money behind them. Financial Fine Print has helped me research companies much more thoroughly. By showing me step-by-step methods to dissect the footnotes in the corporations' financial statements and annual reports, I've learned where all of the unflattering yet legally accountable information is usually hidden in order to make better decisions. I heartily recommend this book for any savvy investor who is unwilling to invest in a company without having personally researched it first.

Highly Recommended
Hard to believe that a financial how-to-book like this would be a page
turner. But, I thoroughly enjoyed this easy-to-read, timely and well
written book.

Leder's tactics and strategies for lay investors are
invaluable. She provides the insight and perspective of a professional
analyst.

"Bottom Line" a book well worth the investment.

An individual investors' best friend
The investment club that I'm in wound up losing a lot of money on Healthsouth, so we've been very cautious over the past year. But with the market rising, we know that all of this caution has wound up costing us money. Luckily, one of our members received Financial Fine Print as a Christmas present this year. Over the past month or so, this book -- now dog-eared -- has made its way to all 15 of us and we now feel as if we're better investors as a result. I finally decided to buy my own copy because I think it's one of the best books available for individual investors who are looking to do their own research on stocks. There's so many great examples of the sorts of things companies try to hide from their investors in their SEC filings -- information investors need to have before they put their money on the line.

One of the things our group has done over the past month is to go back and look at Healthsouth's SEC filings to see if we would have made the same mistakes. Now armed with Ms. Leder's expert advice, we found numerous "red flags" that would have prompted us to sell the stock before Healthsouth's problems became so apparent. Yes, hindsight is always 20-20, so it's easy to say that now. But we all still feel that we've learned so much from this book that we can now invest with a lot more confidence, instead of being pre-occupied with the fear that we're buying another company that's much more interested in enriching its executives at the expense of their shareholders.

Most of the other accounting-related books our group has read -- and we've read a bunch -- all seem to be aimed at a professional audience and can be a bit dry unless you're the type of person who thinks FASB is fascinating. Not this book. Using easy to understand language and examples that help you put the complicated accounting into perspective, this excellent book is an individual investor's best friend!

Financial Fineprint
Is there any way an ordinary investor can protect themselves from shady corporate accounting? YES!! Michelle Leder's book Financial Fineprint has given me the tools to become a better investor.

Not only does she do an excellent job of breaking down annual reports and SEC filings in a very organized and clearly written manner , she also provides an invaluable service by guiding the reader through the footnotes of financial statements, pointing out indicators of accounting tricks and obscuring tactics. Ms. Leder gives the average investor the means to find out for themselves about the companies they invest with. I can now spot those Inflated profits, questionable related party transactions, hidden expenses, etc., before I decide to buy a particular stock.

This book is not simply a "How to" book, however, as it is written in a more narrative and reader friendly style, with personal accounts and fun annecdotes.

I highly reccomend this book for anyone who wants to have as much knowledge at their fingertips as possible before making important financial decisions. ... Read more

Book Description

Risk management and measurement are now, without doubt, the hottest topics in the finance world. Today, quantifying risk management is not only a management tool — but is also used by regulators for banks and finance houses. Beyond Value at Risk provides a comprehensive guide to recent developments and existing approaches to VaR and risk management, going beyond traditional approaches to the subject and offering a new, far-reaching perspective on investment, hedging and portfolio decision-making. The key to this distinctive approach is a new decision rule — the ‘Generalised Sharpe Rule, and its practical applications. Beyond Value at Risk provides the answers to key questions, including:

• How to implement VaR and related systems in the real world
• How to make vital investment decisions and estimate their effect
• How to make hedging decisions
• How to manage a portfolio

Reviews (9)

A concise treatment of VaR
The author goes right to the point. He explains well the VaR-related mathematics. There are a few mistakes, which would be easier to note if all derivations were provided. Overall, this is an excellent book.

Best book on VaR
When we went to implement a VaR system, the price tag was going to exceed seven figures. Needless to say, I didn't hesitate to drop some money buying the available books on VaR. They all say essentially the same things. For practical worked examples, you can't beat Butler. But unless you are an absolute beginner (do you know what delta and gamma are?) you may find it too basic. The all-round best book is Dowd. It is well organized and a pleasure to read. It covers the math, but without getting bogged down in meaningless derivations. For readers who want more information, there are plenty of references to original sources. I followed up on a number of these, and was pleasantly surprised at how easy some of this stuff is to assimilate.

Not for implementors.
The author has done good work in introducing the basic concepts in Value-at-Risk. However, the text leaves some important statistical and implementation points hidden, making implementing VaR look far too easy. For example, there is no discussion about the problems involved in long-term forecasting of correlations and volatilities.

The much advertised "new distinctive investment approach", the so called "Generalized Sharpe Rule" is a rather naive treatment on classical risk/return analysis. However, the lack of mathematical rigour is well compensated with good references.

Must-Read Book for anyone interested in Risk Management
Best book on VaR to date. Clear, concise, self-contained. Perfect combination of rigurous theory with practical applications. The author has done an excellent job at distilling what is relevant in Risk Management. This book is better than all the other VaR books written so far combined.

Great Book !
I think the book does a very good job in introducing every aspect of VaR. The "ENDNOTES" are very useful as it touches almost all recent ideas in the literature. The second appendix to chapter 6 is an excellent summary of recent research in VaR measurement. I took away one star because (1) My own bias toward mathematical details. The book ignores lot of technical details (2) The book devoted only 5 pages on historical simulation method. I think author could have said lot more about this topic. All in all, its a great book. If you are just diving into this exciting field of risk measurement, this is the best book. ... Read more

Book Description

This book is the first comprehensive, scientifically based study of the nature and impact of intangibles. Weaving case studies and real-world examples with contemporary business theory, Baruch Lev

* establishes an economic framework to analyze managerial and investment issues concerning intangibles; * surveys the impact of intangibles on corporate performance and market values, including management difficulties, risk, questions of property rights, marketability, and cost structure; * analyzes information deficiencies associated with intangibles, including the major economic principles governing intangible investments, limits of management information systems, and recommendations for improved accounting disclosure; * sets forth a comprehensive information system-aimed at satisfying the needs of both internal and external decision makers-to reflect the impact and value of intangibles within the context of enterprise performance. ... Read more

Reviews (6)

Concise analysis of intangible management
The discipline of intangible management (knowledge management) has been around for over a decade; there have been many attempts in better understanding & management of intangible assets, with different perspective (organizational learning, technology, strategy etc). Lev has provided a very concise analysis of intangible management with an economics perspective. His analysis is very systematic, robust, with support of empirical studies. I find his treatment of the subject coherent and enjoyable to read. I find the recommendation part slightly weak, the value chain scorecard does not provide significant enhancement over Kaplan & Norton's balanced scorecard.

Making the Invisible Visible
The topic of intangible assets is one of the most vexing issues facing corporations, investors and policymakers today. Professor Lev's book is an important contribution to the literature on intangible assets. The author is well-informed on the inadequacies of current accounting practices and his prescriptions for dealing with the problems are extremely insightful. What makes this book special is the author's obvious passion and enthusiasm for his subject. This book deserves more than five stars.

A unique combination of theory, evidence, and solutions
With the collapse of dot coms and many other high tech companies, many wonder whether intangibles should also go by the wayside. In his book, Lev persuasively argues otherwise. In today's environment, in both old and new economy sectors, the only systematic and sustainable drivers of value and growth are intangible assets, such as patents, brands, unique supply and distribution processes, and human resource practices.

This landmark book represents the most comprehensive and thorough economic analysis of intangibles to date. Building on the author's high-impact research and first-hand experience working with executives, consultants, and regulators, the book offers a coherent framework for understanding the fundamental economics of intangible assets. Baruch Lev identifies attributes of intangibles that are different from tangible assets (property, plant, and equipment), by focusing on their distinctive role in value-creation. He highlights the most critical issue concerning intangibles: the need to make relevant information available to outsiders.

Perhaps the most difficult job in tackling a challenging issue, such as intangibles, is to recommend a practical solution. Baruch Lev proposes an information system, the Value Chain Scoreboard, to enhance information disclosure about intangibles. A notable feature of the system is its emphasis of key drivers in the creation of valuable intangible assets, as opposed to ex post measurement of performance. Although the focus is on improving external information communication, its mission of reflecting the valuation-creation process of intangibles makes the system potentially useful for managers who want to monitor the performance of investment in intangibles.

With a wonderful blend of real-world stories and easily understood economic reasoning, the book also has tremendous educational value, in a variety of business disciplines. It is an especially valuable source for those interested in learning about managing knowledge-based business.

An educational must for the smart businessperson
This book makes a huge contribution to the intellectual and practical tool-kit of the smart businessperson. Smart businesspeople sense that intangibles can be the key to creating huge value in the New Economy. What Baruch Lev does so persuasively in his book is to clarify that general sense into sharp knowledge.

Intangibles have very different business attributes than do tangible investments in land, buildings, machinery, and the like. Baruch clearly and cleanly lays out the economic issues involved and summarizes the relevant evidence from a variety of business disciplines (a significant portion of which is from his own highly innovative research and real-world consulting experience).

The book is particularly accessible to anyone who has MBA. I've used the book successfully in my own teaching on the New Economy, and strongly recommend it to anyone interested in learning key insights about today's business environment.

Excellent Overall - weak in Human Capital
Overall, Lev has created a landmark review of the state-of-the science in Intangible Asset Valuation. I haven't found a better book on this very new area, particularly from an Academic Finance point of view.

My main quibble is with his lite treatment of human resource drivers of value. In making his conclusion, he places more weight on a working paper than he does on two peer-reviewed papers in good journals showing relationships between high-end HR practices and shareholder value.

Lev suggests nicely, though, how value gets created, and specific metrics (with empirical support) that are helpful in each part of the value chain. Rather than citing Kaplan & Norton, he creates his own "Value Chain Scoreboard". If he informed his approach with new ideas from Organizational Psychology (e.g. John Bodureau), Industrial Engineering and Marketing, and this would be 5 stars.

Overall, I like Jeanne DiFrancesco's (ProOrbis) ideas better for more concrete application of intangible value creation, measurement and optimal asset mix. ... Read more

Book Description

Essential, accessible guidelines for interpreting and using financial information

"A wonderful resource for nonprofit managers and board members alike. It hits the mark by simplifying accounting concepts and providing practical advice that can help nonprofits achieve a higher degree of accountability."
–Paula Van Ness, President and CEO, Make-A-Wish Foundation® of America

"After thirty-three years of managing in the nonprofit sector, I find I could have used the information in Streetsmart when I first began my career. The book is a must-read for anyone interested in the effective management of nonprofit organizations."
–George W. Kessinger, President and CEO, Goodwill Industries International, Inc.

"The first edition of McLaughlin’s book was a masterpiece–clearly written, concise, and insightful. These traits also characterize the Second Edition. This is an excellent text for students and also a reference that every nonprofit professional should have on their bookshelf."
–Norman A. Dolch, PhD, Director of the Nonprofit Programs and Professor of Sociology
Louisiana State University in Shreveport

"Tom McLaughlin contributes a valuable tool to those working for the betterment of society in the nonprofit fields: an important, highly readable, intelligent review of those issues which determine success and failure. All too often, well-meaning nonprofit managers find their organizations in constant crisis due to their mission-focus and mission-drive to the detriment of sound financial management. Streetsmart Financial Basics is a fast way of balancing management skills short of returning for an MBA."
–Jeffrey R. Solomon, PhD, President, The Andrea and Charles Bronfman Philanthropies

The Second Edition of this popular resource explains in plain English how to read, interpret, and implement financial data from bookkeepers and accountants to make management decisions that ensure an organization’s long-term financial viability. Organized into four distinct parts–Analysis, Accounting, Operations, and Control–this book offers a host of hands-on resources for managers, including:

• A CD-ROM containing spreadsheet templates for financial reports, word-processing checklists, sample documents, and real-world examples of management in action
• Dozens of easy-to-read charts, tables, checklists, and instructive sidebars
• Inserted text boxes highlighting supplemental information
• Special comments in the narrative linking the material to personal financial management matters

Book Description

An action-driven approach to assessing, creating, and protecting value

"The timing for publication of Eleanor Bloxham’s Economic Value Management is providential. We are assailed by the reality that the board of directors of leading companies have approved, no, have directed, accounting practices that inflate the reported earnings but that lack economic substance. Audit firms in search of personal wealth have been selling‘earnings’ from their consulting division to their full client list. This volume is uniquely couched to restore integrity to the financial understanding of corporate functioning. If you want–and you should–to start getting American business back on the right track, you should read this book."–Robert A. G. Monks, Publisher of www.ragm.com and several books about corporate governance

"Educated investors are essential to successfully functioning capital markets. At this critical time in our financial history, restoring the confidence in our financial system lost over the past year will depend upon financial advisors and investors truly understanding the companies they invest in. As Economic Value Management shows, being educated means more than understanding the unique language of the stock market, it is more than reading a prospectus or an annual report, it is more than listening to an analyst’s opinions. Being educated requires a genuine understanding of the value of a company."– Mary L. Schapiro, Vice Chairman, President, Regulatory Policy and Oversight, NASD (National Association of Securities Dealers)

"Economic Value Management would have limited much of the economic turmoil we have experienced in the last eighteen months. It is the way a company should be managed."– John McCoy, Chairman of Battelle Memorial Institute, retired Chairman and CEO of Bank One Corporation

"Nothing could be more appropriate and needed at this time in history than understanding how decisions affect corporate economic value. Eleanor Bloxham’s exploration of this issue is clear, easy to follow, and thorough in its breadth. Had corporate officers used economic value management techniques throughout their organizations and investors focused on such issues, there would have been much greater rationality in the stock market with much less eventualbloodletting. Indeed, in the aftermath of recent disclosures, the focus on Economic Value Management metrics should increase substantially, and this book provides a solid foundation for understanding such an approach."–Joseph A. Alutto, Dean and John W. Berry Sr., Chair in Business, Fisher College of Business, The Ohio State University ... Read more

Reviews (6)

This Book is a Must Read to Understand Economic Profit
When practitioners, who have actually rolled up their sleeves and implemented, write a book, it is usually a good read. In Eleanor Bloxham's case, this is a great read.

There is so much confusion about what operational and strategic levers an organization should push or pull to create rather than destroy shareholder wealth. Most articles slip into gross platitudes and sloganeering and sidestep the "how to."Bloxham's book dives in but explains adnmittedly complex interelationships in a way you can understand them. She does a fine job integrating the component tools, like the balanced scorecard and activity based costing, into economic value management.

Some day boards of directors may find this to be the standard book for assisting their shareholders make, not lose, money.

Cutting Through the Confusion about Performance Metrics
Corporate senior executives are subjected to pressure for performance from many constituents - shareholders, customers, employees, governmental and regulatory authorities, rating agencies, board members, and securities analysts.And, since these are by definition high achieving individuals, some of the greatest pressure is from within.The existence of many constituents, many with conflicting objectives, often makes it very difficult for CEO's, CFO's and board members to focus on key performance goals and metrics.Over the course of my 34 year career as a corporate banker, I've seen many confused executives, pressured for EPS growth, revenue growth, ROE, but not necessarily understanding the long run impact of any or all of these performance metrics.

Ms. Bloxham has produced a superb book that takes a "holistic" view of the process of identifying performance criteria for senior executives, and not just for those in the private sector.She and I share common views about the benefits of economic value added metrics, but she has gone well beyond this to address many of the conflicts for performance faced by executives.She provides an excellent framework for establishing a set of logical goals and performance metrics for managing complex businesses and non-profit organizations.

essential, but enjoyable reading for excecutives
A friend of mine recommended this book to be, but when I first saw the title of the book I wasn't sure what it was going to
be about. It seemed a bit intimidating. However, the book is very easy to read, has incredible insights and having read it, I now can certainly understand why the book was named a late addition candidate to "ONE OF THE BEST BOOKS of 2002" and a CEO "RECOMMENDED READ" by CEO refresher, an independent editorial board recognized by the Harvard Business School and
the Wall Street Journal. I think it is one of the best books on business I've ever read.

I'm on my second reading of this book and as I go through it I'm revising my business unit's plans for the coming fiscal year.As Bloxham points out, change is a difficult process, but worth it, so I'm sure I'll be referring to this book for years to come.

essential reading - but enjoyable reading for executives
A friend of mine highly recommended this book to be, but when I first saw the title of the book I wasn't sure what it was going to be about. It seemed a bit intimidating. However, the book is very easy to read, has incredible insights and having read it, I now can certainly understand why the book was named a late addition candidate to "ONE OF THE BEST BOOKS of 2002" and a CEO "RECOMMENDED READ" by CEO refresher, an independent editorial board recognized by the Harvard Business School and
the Wall Street Journal. I think it is one of the best books on business I've ever read.

I'm on my second reading of this book and as I go through it I'm revising my business unit's plans for the coming fiscal year.As Bloxham points out, change is a difficult process, but worth it, so I'm sure I'll be referring to this book for years to come.

Economic Value Management
This book is a winner!It emphasizes stewardship of resources, and explains in detail with excellent examples, how to implement a new way of thinking about responsibility.The book is an enjoyable read and packed with suggestions for action. ... Read more

Book Description

Sample exam questions and updated information on the latest developments in the field for valuation candidates and professionals

• Includes questions and exercises that typically appear on accreditation exams
• Covers the most frequently encountered errors on reports and in examinations
• Reflects the latest business valuation developments, viewpoints, court case references, and data resources
• Contains hundreds of multiple-choice and true/false questions, short problems, and fill-in-the-blank questions
• Includes eight hours of CPE credit through a self-study examination

A companion to Shannon Pratt’s Business Valuation Body of Knowledge, Second Edition or a stand-alone resource, the Business Valuation Body of Knowledge Workbook, Second Edition keeps ABV, ASA, CBA, and CVA candidates and current practitioners up to speed on the latest developments in this constantly changing discipline.

Order your copy today! ... Read more

Book Description

This popular book supplies readers with the latest principles and techniques for the evaluation of engineering design. The emphasis is on analysis and estimating. Included in this new edition is a chapter that introduces principles that deal with bringing inventions to the marketplace.It analyzes labor, material, accounting, and forecasting; then the theme of estimating is developed, with a study of methods, operations, and products.A versatile and extremely usable book, it's the perfect resource for engineers, managers, and entrepreneurs. ... Read more

Book Description

Excel Applications for Corporate Finance teaches students how to build financial models in Excel to solve common corporate finance problems.The book comes packaged with a free Excel tutorial CD-ROM to brush up on their spreadsheet skills.The text helps students learn the intuition behind building the spreadsheets so that they can apply it to other types of problems instead of onlyproviding “cookbook” instructions on how to build it. ... Read more

Book Description

Developments in IT and e-commerce, large-scale mergers and acquisitions, andincreased outsourcing all suggest that operational risk exposures are substantialand growing. In recent years, bankers and financial professions have recognizedthe crucial and growing importance of operational risk management, and thefield is currently undergoing a surge of innovation and development. In thisauthoritative, up-to-date book, Operational Risk, leading operational riskmanagement expert Carol Alexander brings together contributions from theworld's leading experts to identify today's best practices for measuring andmanaging operational risks, and assessing them in the broader context of allrisk. ... Read more

Book Description

Conquering the complexity in products and services can generate larger contributions to profits and growth than nearly any other business strategy

Here's a guarantee: Somewhere in your business, there is too much complexity. You may also be losing out by having too little complexity where it counts - in the products, services and options you offer to customers. Either way, the impact of complexity is enormous in terms of lost profit and missed growth opportunities.

Conquering Complexity in Your Business shows how to break through the ceiling on profits and growth by implementing the three rules for conquering complexity:

• Eliminating complexity that customers will not pay for
• Exploiting the complexity that customers will pay for
• Minimizing the costs of the complexity you offer

You'll find methods and tools you need to:

Book Description

From the bestselling author of F.I.A.S.C.O., a
riveting chronicle of the rise of dangerous
financial instruments and the growing crisis in American business
The still-unfolding financial story is terrifying. One by one, major corporations such as Enron, Global Crossing, and Worldcom are imploding all around us, prey to a greed-driven culture and dubious or illegal corporate finance and accounting. Our financial system has suddenly reached a perilous crossroads.
In a compelling and disturbing narrative, Frank Partnoy brings to bear all of his skills and experience as a securities attorney, financial analyst, law professor, and bestselling author to tell the story of the rise of the trading instruments and corporate financial structures that now imperil the economic health of the country. Starting in the mid-1980s with the introduction of the first proto-derivatives, and taking us through such high-profile disasters as Barings Bank and Long Term Capital Management, Partnoy traces a seamless progression to today's dangerous manipulations. He documents how each new level of financial risk and complexity obscured the sickness of the company in question, and required ever more ingenious deceptions. The story becomes more alarming with each passing day, but Partnoy offers a clear vision of how we can step back from the precipice.
... Read more

Reviews (16)

his first book was better
I am about halfway through this book, but so far I enjoyed Frank Partnoy's first book, "FIASCO: Blood in the Water on Wall Street", much better. FIASCO was mainly an auto-biographical account of Partnoy's career at Morgan Stanley. Writing about his own life afforded Partnoy the opportunity to be more anecdotal and humorous about his subject matter. In this book, his focus is on scandals that made the headlines, or even worse, were suppressed from greater public knowledge. (Enron, LTCM, Orange County, the Salomon Bros Treasury auction scandal, etc).

He recants these tales with tongue in cheek humor, and he translates finance-geek-speak into a language which people outside of the business can understand. However, in his Vernacular translation, he loses some of the wind of the real story. Maybe its because I am in the business, so no details need to be spared for my benefit, but I would have preferred reading more technical accounts.

At any rate, Partnoy is a crusader, out to teach the world about the dangers of financial products. Frankly, I think he goes to far in his ranting, and this book is merely a vehicle for him to advance his agenda of reform and regulation. Its true that some people have exploited the market for less than altruistic purposes, but the truth is that derivatives have been more beneficial than harmful to the global financial system. To tell the tale all of the evil in the financial markets without mentioning the good is misleading.

Get this book if you want to understand Wall Street antics
This book is an absolute must read if you want to understand Wall Street shenanigans. Partnoy has done a phenomenal job of demystifying the world of swaps, derivatives and other exotic financial instruments. Even better, he shows how investment banker antics have affected Main Street inhabitants including yourself. How did Orange County and so many other municipalities get so deeply in trouble? The author explains.

I have a Ph.D in business and many finance courses under my belt, but I never quite understood the systemic dangers of the 'financial innovation' that is sweeping our markets. Now that I have, I will sleep much less well at night.

Partnoy describes the evolution of exotic instruments and the characters involved in this evolution. How CS First Boston made securites of virtually any type of debt, Salomon pioneered the CMO and so on. He details the specific wrongdoings of companies like Enron, Global Crossing and WorldCom. He shows you the enabling role played by gatekeepers like accounting firms, law firms, analysts and credit rating agencies.

Even more important, he shows you exactly how the collusion happened and why. He gives you both an aerial view of the markets and a down-in-the-trenches description. I often wondered why, in efficient markets, participants voluntarily involved themselves in such convoluted transactions that had high costs in terms of record-keeping and fees. The answer, as Partnoy shows, is that virtually all of these arrangements permit some set of parties to subvert law or regulation or both. This is true domestically and internationally.

He graphically describes how lobbying keeps regulators at bay and the venality and ineffectuality of politicians. The chairperson of the Commodities Futures Trading Commission, for example, exempted important parts of Enron's business from regulation and, just weeks later, joined Enron' board. There are many such stories that show exactly how self-serving our legislators and regulatory guardians are.

My quibbles are minor. While Partnoy is clear, his language is colorless. Perhaps his legal background has something to do with this. Given the strength of his material and the depth of his research, he could have made this book a popular bestseller if he had used more forceful colloquial expression.

Also, he does not talk at all about the role of technology in this evolving mess. Greedy, incredibly smart bankers have always been with us. What has permitted them to have this huge impact now is the ability of computers to churn massive amounts of data, pick out the faintest of patterns and keep records of incredibly complex transactions involving dozens of parties over vast stretches of time.

This said, this is the best book I have yet come across that explains how and why large scale financial malfeasance happens. And why it is hardly ever punished. You will understand why the perpetrators of Enron, Global Crossing, Adelphia, WorldCom, Sunbeam and so many others will walk and hold on to their vast gains. Start praying that there is justice beyond our courts.

Good advice and exiting facts
This book it's a very exiting journey since the late 80's until the issues of enron and worldcom, it covers step by step how financial innovation has been changing and is a good reference for anyone who likes true stories.

Partnoy is the man !!!
POSITIVE: In-dept overview of what happend in the last 15 years in "high finance". The authors knowledge on the topics can hardly be beaten. Author pretty harsh in critisicing Moodys, CDOs etc. Very interesting findings (e.g. trading profits at Enron, harsh treatment of Quattrone). The author provides some good solutions in the finance world at the end of the book.

NEGATIVE: Value creation, especially of derivatives, is not mentioned in the book. Thus, book rather critical. Book not as readable as FIASCO due to more difficult topics (and NOT authors fault).

Partnoy's still complaining.
Frank Partnoy, author of this book and the very silly 'FIASCO: Blood in the Water on Wall Street', implies an illustrious career structuring and selling complex derivatives. In actual fact he worked on Wall Street for just two years in total ' straight out of college. Instead of succeeding by staying the course, Partnoy made his millions by violating the Wall Street code of omerta and knocking out a sensationalist, mostly ignorant, account of the year or so he spent at Morgan Stanley. Infectious Greed is the follow-up, which purports to document the wreckage across the market since.

Having read FIASCO, which was valuable mostly for its unintended humour, I didn't expect much of Infectious Greed; I was rather looking forward to slating it, to be honest. It has the same air of maiden-aunt prurience as FIASCO but, almost despite himself, Partnoy's conclusions here aren't especially objectionable, and mostly undermine the tone of studied outrage he cultivates throughout the early part of the book.

The thesis of the book is that the financial markets have, of late, been corrupted by deceit and risk (hang on a minute: financial markets are *about* risk. Is it meaningful to say they can they be corrupted by it?). Yet at least half the book recounts events in the derivatives market which took place ten or more years ago, in the primordial soup of the derivatives market. If a week is a long time in politics, a decade is an aeon on Wall Street: in 2004, the exploits of Bankers Trust and CS First Boston in 1993 aren't exactly current. The nascent derivatives market is now a mature trillion dollar industry. I dare say Professor Partnoy wouldn't recognise it.

Partnoy's explanations of the transactions are, however, lucid: so much so that they undo his conclusions. At one point he describes in two paragraphs the 'whipsaw' risk of an 'Inverse IO' instrument. It's a very clear explanation, which completely undermines his concluding observation that 'it was unclear whether any mutual-fund mangers [the investors] understood all of this'. Here's the thing: to put not too fine a point on it, a professional fund manager who doesn't understand what can be lucidly explained in eight sentences, yet still invests in it, should be shot. So should his employer. And neither deserves the respect (for which, read, money) of the public. It might seem a harsh lesson, but it wouldn't take too many collapses to shake the mums and dads in Ohio out of their complacent stupor and shift their funds to a manager who was prepared to employ qualified managers and supervise them properly. The market has a way of teaching people valuable lessons that market regulation and government bail-outs really don't.

The funny thing is, Partnoy does continually stumble over this axiom, but doesn't recognise it. He quotes a Peat Marwick partner who derides ignorant fund managers thus: 'if you don't understand, you might as well place it all on red at Atlantic City or Las Vegas, because at least there you get free drinks.' Though Partnoy doesn't think so, the analogy is a good one: the very nature of Las Vegas (and Wall Street) ' its immense and lavish megaliths ' is the most graphic illustration of the fact that, unless you really know your onions, you are NOT going to end up a winner. The house is; which is why it can afford to build a full size Tomb of Tutankhamen in the middle of the hotel and charge only fifteen bucks a night for a room. Like Casinos, Wall Street trading desks have a motive ulterior to realising some poor schmuck's American dream; the object is to make ' not lose ' money, and this is exactly what they do and a statistically constant basis.

Partnoy repeatedly calls for regulation of the derivatives market without ever making a case for how this might be done or how it would prevent the losses he documents in the book: criminal statutes don't stop people committing murder, after all. All the regulation in the world won't stop fraudsters (if they're committing fraud, then by definition the regulations are already there, and they're breaking them). On the other hand, exploring the idiosyncrasies of rules *without* breaking them is the prerogative of every citizen, not just Wall Street banks. After all, regulatory arbitrage is only possible because of prescribed regulatory rules tend not to precisely reflect economic reality. If rules have irrational boundaries, then it is economically rational to exploit them.

Eventually, Partnoy acknowledges this. He cannot ultimately muster much venom for the perpetrators of the Enron debacle, and by the epilogue, where he sets out his recommendations (full marks to him for putting his money where is mouth is, by the way: it's one thing to criticise; quite another to suggest a solution) his proposals don't include regulation of the wholesale derivatives market ('some derivatives markets might appropriately have been left unregulated' he concedes) but simply equivalent accounting treatment with comparable financial instruments, and most of his fire is reserved not for Wall Street traders or greedy executives, but the rating agencies which operate under the umbrella of a government-sponsored oligopoly (only Moody's, Fitch and S&P are recognised for regulatory purposes). And you'll never guess what his solution is for dealing with the rating agencies: Without a hint of irony, he suggests they be deregulated!

By the final sentence of the book, it seems the most elementary elements of market theory may have finally slipped between bat and pad: Partnoy asks his readers whether they have taken any prudent steps to properly evaluate their investments before putting up any money: 'If you answered 'no,' you have one more person to blame in addition to the accountants, bankers, lawyers, credit raters, corporate executives, directors and regulators who failed to spot the various financial schemes of recent years. You.'

Not, in the final analysis, quite the damning indictment it cracked up to be, then.

Olly Buxton ... Read more