Accounting Information, Regression Analysis, and Financial Management

The following sections are included:

• Introduction

• Financial Statements: A Brief Review

  • Balance Sheet

  • Statement of Earnings (Income Statement)

  • Statement of Equity

  • Statement of Cash Flows

  • Annual vs Quarterly Financial Data

• Critique of Accounting Information

  • Criticism

  • Method for Improvement

    • Use of Alternative Information

    • Statistical Adjustments

    • Application of Finance and Economic Theories

• Static-Ratio Analysis and Its Extension

  • Static Determination of Financial Ratios

  • Liquidity Ratios

  • Leverage Ratios

  • Activity Ratios

  • Profitability Ratios

  • Estimation of the Target of a Ratio

  • Dynamic Analysis of Financial Ratios

    • Single-Equation Dynamic Adjustment Process

    • Simultaneous Determination of Financial Ratios

  • Statistical Distribution of Financial Ratios

• Cost-Volume-Profit Analysis and Its Applications

  • Deterministic Analysis

  • Stochastic Analysis

• Accounting Income vs Economic Income

• Summary

• Problem Set

• Appendix 2.A: Simple Regression and Multiple Regression

• Appendix 2.B. Instrumental Variables and Two-Stage Least Squares

• References for Appendix 2

• References for Chapter 2