Study plan
Reading Financial Statements and Disclosures as a Strategic Communicator
Understand how companies raise capital, read income statements and balance sheets, calculate margins, EPS and valuation metrics, and apply corporate disclosure rules, using the textbook's Netflix, Mars and Alphabet examples.
Lessons in this plan
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1
Finance and the capital markets
Explain how companies raise capital through retained earnings, loans, bonds and stock, and how public and private companies such as Mars differ in disclosure.
- 2 Wall Street players and going public Describe the key Wall Street players and the IPO process, using Netflix's 2002 IPO of 5.5 million shares at $15 as the example.
- 3 Reading the income statement and profit margins Read Alphabet's 2019 income statement and calculate its gross, operating and net margins and diluted EPS.
- 4 Reading the balance sheet and valuation essentials Interpret Alphabet's 2019 balance sheet and calculate book value, market capitalization, enterprise value and the P/E ratio.
- 5 Corporate disclosure rules and filings Identify the main securities laws and regulators and explain when companies file Forms 10-Q, 10-K, 8-K, Form 4 and Schedule 13D.
- 6 Reg FD, earnings calls and guidance Apply Reg FD's rules on selective disclosure, earnings calls and forward-looking guidance, including the deadline for correcting an unintentional disclosure.