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The Financial Numbers Game- Detecting Creative Accounting Practices

3 stars (Too basic and the title is really a misnomer) - Given the promise of the book's title, I was disappointed. "The Financial Numbers Game" is really alomst a misnomer as the book spends many pages on explanations of basic accounting principles - much like an introductory textbook - and then discussed some of the more obvious creative accounting practices. What you do get from this textbook is an overall solid overview of basic GAAP, with a large number of real world examples (which is good). What you don't get is real insight into some of the more interesting ways companies use to manage earnings and their balance sheet. For example, I could not find anything on special purpose entities, off balance sheet financing, dirty surplus accounting, a meaningful discussion of EBITDA beyond the basics, and anything beyond the obvious, really. I also thought the discussion of receivable days was problematic (chapter eight). This may go into too much detail but the authors calculate this ratio based on the ending balance of accounts receivable rather than some average (eg, beginning and ending balance if nothing else is at hand). This actually distorts the ratio and results in an incorrect analysis of the development of receivables where they change between periods. This is not good for two academics. As previous reviewers pointed out, the book has too many repetitions which a good editor should have caught. I like the solid accounting overview and the multitude of examples the text provides and that merits three stars. If you are an MBA student who is interested in an accounting refresher, this may be a book for you. If on the other hand you are a professional analyst or investor - what the authors call serious readers of financial statements in their preface - then this will disappoint you. 5 stars (Highly Recommended!) - A special note in the preface of this book explains that it went to press just as the Enron story was beginning to break. Three of its chapters ...
John Wiley - Sons Inc :: Business & Economics & Finance :: Business & Economics :: Accounting - Financial :: Eugene E Comiskey :: Charles W Mulford :: :: The Financial Numbers Game- Detecting Creative Accounting Practices

 

Creative Cash Flow Reporting- Uncovering Sustainable Financial Performance

5 stars (Simply the best book on the subject.) - Messers Mulford and Comiskey have released a primer on what has lately become a messy subject. Unlike other books with a focus on cash--Hackel's book, for example--this one delves a little bit deeper into the subject of financial misreporting. The reader is given a synopsis of how companies say that their cash is operating, whereas it ought to be put under financing or investing cash flow. There is a multitude of similarly constructed arguments. The examples are lucid, apropos, and contemporary. The book also has a deterministic model for calculating CFFO. Read it. 5 stars (Mulford's methodology shows why Cash is King) - Over several years of using and preparing the GAAP-based cash flow statement in analysis, I have found it isn't that useful in enabling me to drill down to understand where a company's real operating cash flow comes from. Mulford's methodology does an excellent job focusing on interim period cash flow information to enable the reader to better spot positive and negative trends in an operating company's performance. I found Creative Cash Flow Reporting to be a most useful treatise on what's wrong with the cash flow statement and how to work around its problems. The section on analysis, the cash flow drivers, and the growth cash-flow profile were particularly helpful. 5 stars (Insightful Analysis of the Latest Corporate Shenanigans!) - Creative Cash Flow Reporting by Dr. Charles Mulford is a terrific resource on some of the latest ways that companies may try to pull the wool over the eyes of the investor community. At CFRA, we make our living by analyzing companies which try to obfuscate their true operational health by playing creative accounting games. What we've seen is that after the Enron, WorldCom and other scandals of several years ago, Wall Street analysts and investors more broadly demanded new metrics to evaluate the health of businesses. As a result, more people than ever look to a co...
John Wiley - Sons Inc :: Business & Economics & Finance :: Business & Economics-Corporate Finance :: Business & Economics-Accounting - Financial :: Eugene E Comiskey :: Charles W Mu :: Creative Cash Flow Reporting- Uncovering Sustainable Financial Performance