Some Financial Analysis Tools

1
Some Financial Analysis Tools

• Bob JensenEmeritus Professor of
  AccountingTrinity University in San Antonio 190
  Sunset Hill RoadSugar Hill, NH 03586
• 603-823-8482rjensen_at_trinity.edu
• http//www.trinity.edu/rjensen/

2
Accounting Theory

• Overview --- http//www.trinity.edu/rjensen/Theor
  y01.htm Local Link --- ..\..\theory01.htm
• Fraud ---http//www.trinity.edu/rjensen/fraud.htm
  Local Link --- ..\..\fraud001.htm
• Electronic Commercehttp//www.trinity.edu/rjensen
  /ecommerce.htm Local Link --- ..\..\ecommerce\000
  start.htm

3
Data

• 218
• 156

4
Tagged Data

• 218
• Weight in PoundsUnited Kingdom Weights and
  Measures Act 1963 Robert E. Jensen190 Sunset
  Hill RoadSugar Hill, NH 03586September 14,
  2007153 p.m.

5
Tagged Data

• 156
• Amortization of Basis Adjustment in USDDecember
  31, 200X1Fair Value Interest Rate SwapABC
  CompanyParagraph 117Under FAS 133 StandardsNot
  the Same Under IAS 39 Standards

6
XBRL

• Think of a set of financial statements as being a
  library
• Think of each piece of data in a set of financial
  statements as a book in the library.

7
XBRL

• Think of a librarian marking up the back
  binding of a book with a classification code such
  as a Dewey Decimal code or a Library of Congress
  Code.
• The marked up book code allows librarians to
  place the book among topic-related books in the
  stacks.
• The marked up book code allows patrons to easily
  find both a given book and related books on a
  topic.

8
XBRL

• Think of the SEC marking up each piece of data
  in a 10-K report with a classification tag based
  on a set of accounting standards such as US GAAP
  or International GAAP
• The SECs tags are in XML extensible markup code
  that that complies with a business reporting
  standard called eXtensible Business Reporting
  Language (XBRL_
• The XBRL tags allow analysts to slice and dice a
  given report or multiple 10-K reports of multiple
  companies.

9
XBRL

• Technology Timeline --- http//www.trinity.edu/rj
  ensen/XBRLandOLAP.htm Local Link ---
  ..\..\XBRLandOLAP.htm
• Bob Jensens Video Tutorials ---
  http//www.cs.trinity.edu/rjensen/video/Tutorial
  s/ Local Link 2001 --- ..\Video\Tutorials\XBRLdem
  os.wmvLocal Link 2005 --- ..\Video\Tutorials\XBRL
  demos2005.wmv

10
XBRL

• The AICPA and many large companies and Wall
  Street first carried the ball by developing a set
  of standards for XBRL tagging so that within a
  designated GAAP such as US GAAP, tagged data
  would be comparable between different
  companies.http//www.xbrl.org/Home/
• The SEC took the lead in the tremendously costly
  effort of encouraging/requiring companies to mark
  up SEC registration reports with XBRL tags. There
  are various software packages available for
  marking up XBRL tags. One of the popular software
  alternatives is called Dragon Tag from Rivet
  Software --- http//www.rivetsoftware.com/

11
Dragon View Released as Open Source in 2007 The
FREE XBRL Viewer!

• Dragon View's release into open source enables
  users and developers to benefit from Dragon
  View's extensive functional and tested code
  base.  Dragon View played an important role in
  Rivet being granted a contract from the U.S.
  Securities and Exchange Commission (SEC) to
  create an XBRL viewer for the SEC Web site.

12
Jensens XBRL Tutorials --- http//www.cs.trinity
.edu/rjensen/video/Tutorials/

• 2001 --- Local Link ..\Video\Tutorials\XBRLdemos.
  wmv
• 2005 --- Local Link ..\Video\Tutorials\XBRLdemos2
  005.wmv

13
Pivot Table Tutorial

• Web Link to Excel Workbook --- http//www.cs.trin
  ity.edu/rjensen/EdTech/MicrosoftPivots/PivotingTu
  torial/
• Local Link to Excel Workbook ---
  ..\MicrosoftPivots\PivotingTutorial\PivotTableTut
  orial.xls

14
Financial Analysis Softwarehas Evolved over 25
Years

• MicrosoftPivotTable Analysis ---
  http//www.cs.trinity.edu/rjensen/EdTech/Microso
  ftPivots/http//www.microsoft.com/msft/financial/
  default.mspx Local Links --- ..\Video\Microsoft
  Pivots\ExcelPivotMicrosoft.wmv..\MicrosoftPivots\
  MicrosoftInvestorRelationPivots\Year2001\microsoft
  History2001.xls..\MicrosoftPivots\MicrosoftInvest
  orRelationPivots\Year2001\microsoftWhatIf2001.xls
  
• SP Core EarningsLocal Links ---
  SPcoreEarnings\core powerpoint
  110702.pptSPcoreEarnings\CoreEarningsOilGas.xls

15
Financial Analysis Softwarehas Evolved over 25
Years

• fisCal Videohttp//fiscalsoftware.net/?gclidCPS7
  9faDqI4CFSasGgodIiUhaA Local Link ---
  ..\Video\FinancialAnalysis\fisCal.wmv
• SP Core Earnings --- http//www.cs.trinity.edu/
  rjensen/EdTech/PowerPoint/SPcoreEarnings/ Local
  Links --- SPcoreEarnings\core powerpoint
  110702.pptSPcoreEarnings\CoreEarningsOilGas.xls

16
WebLedgers

• Webledger Alternatives --- http//www.trinity.edu
  /rjensen/webledger.htm Local Link ---
  ..\..\webledger.htm
• NetSuite-Controller VideoLocal Link ---
  ..\Video\FinancialAnalysis\NetSuite-Controller.wmv
  

17
WebLedgers

• Great for small and some medium-sized companies
• Eliminate the need for buying, updating, and
  maintaining accounting and related software
  (payrolls, billing, accounts receivable,
  inventory ordering, and financial statement
  analysis and preparation).
• Add on options for Customer Relations Management
  (CRM), Executive Summaries, and Fiancial
  Statement Analysis.

18
WebLedgers

• Eliminates the cost of expensive IT staff with
  typically high turnover and security risks.
• Over a million times less likely to have a
  systems crash.
• Data entry from anywhere in the world
• Integrates easily with other company databases in
  a ERP system

19
WebLedgers

• NetLedger Student Team Project ---
  http//www.cs.trinity.edu/rjensen/EdTech/netledg
  er/NetLedger.pdf
• Local Link --- ..\netledger\NetLedger.doc

20
Two Types of Financial Analysis

• Fundamental analysis maintains that markets may
  misprice a security in the short run but that the
  "correct" price will eventually be reached.
  Profits can be made by trading the mispriced
  security and then waiting for the market to
  recognize its "mistake" and reprice the security.
  
• Technical analysis maintains that all information
  is reflected already in the stock price, so
  fundamental analysis is a waste of time. Trends
  'are your friend' and sentiment changes predate
  and predict trend changes. Investors' emotional
  responses to price movements lead to recognizable
  price chart patterns. Technical analysis does not
  care what the 'value' of a stock is. Their price
  predictions are only extrapolations from
  historical price patterns.

21
Jensens XBRL Tutorials

• 2006 --- ..\Video\Tutorials\XBRLdemos.wmv
• 2005 --- ..\Video\Tutorials\XBRLdemos2005.wmv

22
The End