, '·
Financial Statement
Analysis and
Security Valuation
Fifth Edition
Stephen H. Penman
Columbia University
, TheMcGraw·Hill Companies
FINANCIAL STATEMENT ANALYSIS AND SECURITY VALUATION, FIFTH EDITION
International Edition 2013
Exclusive rights by McGraw-Hill Education (Asia), for manufacture and export. T his book cannot be re-
exported from the country to which it is sold by McGraw-Hill. This International Edition is not to be sold or
purchased in North America and contains content that is different from its North American version.
Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc. , 122 l Avenue of the
Americas, New York, NY 10020. Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights
reserved. Previous editions © 2010, 2007, and 2004. No part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without the prior written
consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other
electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
10 09 08 07 06 05 04 03 02 01
20 15 14 13 12
CTP MPM
All credits appearing on page or at the end of the book are considered to be an extension of the copyright
page.
When ordering this title, use ISBN 978-007-132640-7 or MHID 007-132640-5
Printed in Singapore
www.mhhe.com
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About the Author -~ -
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Stephen H. Penman is the George 0 . May Professor in the ·Graduate School of Business,
Columbia University. He also serves as codirector of Columbia's Center for Excellence in
Accounting and Security Analysis. Prior to his appointment at Columbia in 1999, Penman
was the L. H. Penney Professor in the Walter A. Haas School of Business at the University
of California at Berkeley. From 1990 to 1995 he served as Chairman of the Professional
Accounting Program and Chairman of the Accounting Faculty at Berkeley. He has served
as a Visiting Professor at the London Business School, as the Jan Wallander Visiting
Professor at the Stockholm School of Economics, and in the Cheng Tsang Mun Chair
Visiting Professorship at Singapore Management University.
Professor Penman received a first-class honors degree in Commerce from the University
of Queensland, Australia, and M.B.A. and Ph.D. degrees from the University of Chicago.
His research deals with the valuation of equity and the role of accounting information in
security analysis. Professor Penman has published widely in finance and accounting
journals and has conducted seminars on fundamental analysis and equity valuation for
academic and professional audiences. In 1991 he was awarded the Notable Contribution to
Accounting Literature Award by the American Accounting Association and the American
Institute of Certified Public Accountants, and in 2002 he was awarded the American
Accounting Association and Deloitte & Touche Wildman Medal for the first edition of
Financial Statement Analysis and Security Valuation, published by McGraw-Hill/Irwin. In
2011 Penman received the Rodger F. Murray Prize from the Institute for Quantitative
Research in Finance. His book, Accounting for Value, was published by Columbia
University Press in 2011. He is an editor of the Review ofAccounting Studies and is on the
editorial board of the Schmalenbach Business Review.
v
Financial Statement
Analysis and
Security Valuation
Fifth Edition
Stephen H. Penman
Columbia University
, TheMcGraw·Hill Companies
FINANCIAL STATEMENT ANALYSIS AND SECURITY VALUATION, FIFTH EDITION
International Edition 2013
Exclusive rights by McGraw-Hill Education (Asia), for manufacture and export. T his book cannot be re-
exported from the country to which it is sold by McGraw-Hill. This International Edition is not to be sold or
purchased in North America and contains content that is different from its North American version.
Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc. , 122 l Avenue of the
Americas, New York, NY 10020. Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights
reserved. Previous editions © 2010, 2007, and 2004. No part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without the prior written
consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other
electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
10 09 08 07 06 05 04 03 02 01
20 15 14 13 12
CTP MPM
All credits appearing on page or at the end of the book are considered to be an extension of the copyright
page.
When ordering this title, use ISBN 978-007-132640-7 or MHID 007-132640-5
Printed in Singapore
www.mhhe.com
, - w;'~.aw;:..,;.;,"..,~,(-f'>*"'-~~c')
w. ~l _:.iW;.,,,.~1~;.J.:c~I > ...~~.·y,);~,
. ~~
About the Author -~ -
slot l~>;L._; Q
~
JJ /)_/Xf-:~ tJ ;:~ ;i
: ...S; J..O ".;~ i\
•.'
t·~
...'·!
~!!!9~~13191~'=19'=-~~~'."··
Stephen H. Penman is the George 0 . May Professor in the ·Graduate School of Business,
Columbia University. He also serves as codirector of Columbia's Center for Excellence in
Accounting and Security Analysis. Prior to his appointment at Columbia in 1999, Penman
was the L. H. Penney Professor in the Walter A. Haas School of Business at the University
of California at Berkeley. From 1990 to 1995 he served as Chairman of the Professional
Accounting Program and Chairman of the Accounting Faculty at Berkeley. He has served
as a Visiting Professor at the London Business School, as the Jan Wallander Visiting
Professor at the Stockholm School of Economics, and in the Cheng Tsang Mun Chair
Visiting Professorship at Singapore Management University.
Professor Penman received a first-class honors degree in Commerce from the University
of Queensland, Australia, and M.B.A. and Ph.D. degrees from the University of Chicago.
His research deals with the valuation of equity and the role of accounting information in
security analysis. Professor Penman has published widely in finance and accounting
journals and has conducted seminars on fundamental analysis and equity valuation for
academic and professional audiences. In 1991 he was awarded the Notable Contribution to
Accounting Literature Award by the American Accounting Association and the American
Institute of Certified Public Accountants, and in 2002 he was awarded the American
Accounting Association and Deloitte & Touche Wildman Medal for the first edition of
Financial Statement Analysis and Security Valuation, published by McGraw-Hill/Irwin. In
2011 Penman received the Rodger F. Murray Prize from the Institute for Quantitative
Research in Finance. His book, Accounting for Value, was published by Columbia
University Press in 2011. He is an editor of the Review ofAccounting Studies and is on the
editorial board of the Schmalenbach Business Review.
v
