Warren Buffett has often stated that accounting is the language of business, and one can never learn too much about accounting. Below is a resource of articles on topics such as accounting, valuation, and anything else dealing the language of business.
General Security Analysis
“How to Read a Financial Report” – This is a Merrill Lynch publication printed in 2000 that provides a clear concise overview of how to read a balance sheet, income statement, and to a lesser extent, a statement of cash flows.
“Advanced Financial Statement Analysis” – A great tutorial from Investopedia.com on how to understand GAAP financial statements and some of the necessary adjustments to make accounting numbers reflect the economic reality.
Aswath Damodaran’s Online Classes – Professor Aswath Damodaran, Professor of Finance at NYU’s Stern School of Business, shares a wealth of educational material. Here, you will find his entire MBA level Corporate Finance and Valuation classes online.
“White, Sondhi, Fried” Student Companion Site – “The Analysis and Use of Financial statements” mentioned above is my go-to accounting and financial statement analysis resource. This site contains the cases, appendix, errata, and updates to reflect new accounting standards.
“Goodwill Hunting: Balance Sheets’ Latest Torment” (Barron’s, 2/16/2009)
“IFRS Spells Write-Downs as Goodwill Withers Away” (The Wall Street Journal, 11/24/2008)
“Leases Landing on the Balance Sheet” (CSFB 08/2010)
“On the Balance Sheet-Based Model of Financial Reporting” – Columbia Business School Center for Excellence in Accounting and Security Analysis – September 2007
Purchase Obligations, Earnings Persistence, and Stock Returns (Kwang Lee, Haas School of Business, 01/2010)
Cash Flow Reigns Once Again (The Wall Street Journal, 5/12/2008)–
Morningstar Guide to Equity Options Investing (Morningstar.com)
FASB / IASB
FASB Homepage – The homepage of the Financial Accounting Standards Board. If you love accounting, this is the website for you!
IAS Plus – Deloitte’s page for news on IASB.
A New Approach to Equity Compensation (Investopedia.com) – A good explanation of FAS 123R.
Basic College Accounting – A great intro to (and refresher for) accounting.
Finance 3.0 – A social network dedicated to finance professionals.
Financial Modeling Guide – A resource for financial modeling templates, spreadsheets and tools for analysis.
FRED Add-In (Beta) for Microsoft® Excel® – The Federal Reserve Bank of St. Louis Economic Data (FRED) Add-In provides free access to over 30,000 data series from various sources directly through Microsoft Excel. The Add-In will significantly reduce the amount of time spent collecting and organizing macroeconomic data.
MacAbacus (beta): A great new site that takes you through the steps of building both and M&A and LBO model. Excellent for those of us who didn’t do 2 years in IB. Includes a complete model template.
SSRN Page for Ignacio Velez-Pareja – A list of academic papers published by Professor Velez-Pareja. Many are on the topics of accounting, financial statement analysis, and building financial models.
Global Value Investing
Value Investing – Has it Worked in Emerging Markets? – A study by The Brandes Institute on applying the concepts of value investing to emerging markets.
Finding Out What Execs Are Paid is Tricky (WSJ, 06/26/09) – A good primer on reading executive compensation tables.
Marking to Market
When a Loss Is a Gain (WSJ, 05/19/2008) – An example of how marking-to-market can distort a company’s true gains or losses.
Valuing Cyclicals Like a Pro – A great article on how to value cyclicals with Peter Supino, and analyst with the Weitz Funds.
Pensions / OPEBs
Statement of Financial Accounting Standards No. 158 – There are plenty of places where you can learn the details of pension accounting, but why not go straight to the source?
How to Evaluate Pension Risk (Investopedia.com) – How to adjust financial statements to reflect the true effects of pension accounting.
“The Math Doesn’t Add Up” (Barron’s, 12/8/2008)
New Pension Accounting Rules: Defusing the Retirement Time Bomb (The CPA Journal, 11/2006)
Beware the Pension Monster (Fortune, 12/9/2002) – A great article about the effects of pension accounting in 2002. Given recent equity returns, this article remains relevant today.
Psychology / Behavioral Finance
Your Mind and Your Money – A special NBR report from PBS on Behavioral Finance
“Getting What You Want: A Q&A with the Authors of YES!” (The New York Times, 8/5/2008)
Inside Influence Report – Dr. Robert Cialdini is the president of Influence at Work.
Return on Invested Capital
Bionic Turtle – A short introduction to the concept of ROIC.
“To Pick Winners, Start by Weeding Out the Losers” (The New York Times, 6/10/2007)
Shareholder Forum Home Page – The benefit of an independently conducted Forum process is in providing both investor and corporate decision-makers with the kind of access to information and free exchange of views that might be sought at a traditional shareholders meeting or analyst conference, but with the non-partisan moderation and timely attention needed to effectively examine alternatives for long-term wealth creation.
Tutorial to Quickly Detect Changes in the Footnotes – A fantastic tutorial on how to set up a shortcut to see the footnote changes from quarter-to-quarter or year-to-year. (OldSchoolValue.com)
A Primer on Short Selling (Coalition of Private Investment Companies)
“Frequently Asked Questions about Rights Offerings” – Rights offerings can be a great source of “special situation” ideas.
“A Special Situation at Steak and Shake” – The Motley Fool interviews Columbia Business School Graduate and Founder of Denali Investors H. Kevin Byun about his investment in Steak and Shake.
“Special Situations Investing” – A presentation given by H. Kevin Byun at his alma mater, Columbia Business School.
“Competitive Advantage Period “CAP” – The Neglected Value Driver” (Michael Mauboussin)
“Discounted Cash Flow Methodology” (Bear Stearns)
“DCF Primer” (Investopedia)
“Valuation of CDS” (Lehman Brothers – ironic?)
“The Valuation of a Savings Account – With Seven Insights” (Columbia Business School Professor Stephen Penman)