Comments on: Book Review: Financial Shenanigans

By: Accountants Guide UK

Accountants Guide UK — Tue, 22 Jan 2008 13:31:45 +0000

I read that book recently and found the author to be writing on only one part of the story. Something still seems to be missing there

By: Josh Stern

Josh Stern — Wed, 26 Dec 2007 07:59:39 +0000

Thanks for the book review and follow up to my question/topic, and thanks also to Bill for the links and embedded suggestions. After following some “Customers who bought this item” links at Amazon and misc poking around, I ended up thinking that Stephen Penman’s _Financial Statement Analysis and Security Valuation_ seemed like it would help me the most.

http://www.amazon.com/gp/reader/007253317X/ref=sib_dp_pt/104-9202649-5124742#reader-link

A bunch of cheaper international paperback editions of that book are available through pricegrabber.

By: Doug M

Doug M — Mon, 24 Dec 2007 13:43:22 +0000

This book is included in the CFA program reading materials, and was a nice break from the parched textbook reading assignments.

By: Bill aka NO DooDahs!

Bill aka NO DooDahs! — Sat, 22 Dec 2007 14:13:14 +0000

Put the . where the [dot] is for the link, cut and paste for browser.

http://www.billakanodoodahs [dot] com/2006/09/fundamental-analysis-for-solvency-and-earnings-quality/

Lots of links to papers and articles about cash flow statements. It boils down to two “anomalies” – the accrual anomaly and the financing anomaly. Companies with positive accruals to earnings tend to underperform, and companies that receive cash flow from financing (issuing debt or shares) also tend to underperform.

The article also has some “earnings quality” metrics that I’ve found useful.

I liked the book and have a copy (and a sale link on my site, too), but found it wasn’t as directly useful to trading a value style as some of the papers I link to were.