Praise for The Financial Numbers Game "e;So much for the notion 'those who can, do-those who can't, teach.' Mulford and Comiskey function successfully both as college professors and real-world financial mercenaries. These guys know their balance sheets. The Financial Numbers Game should serve as a survival manual for both serious individual investors and industry pros who study and act upon the interpretation of financial statements. This unique blend of battle-earned scholarship and quality writing is a must-read/must-have reference for serious financial statement analysis."e; --Bob Acker, Editor/Publisher, The Acker Letter "e;Wall Street's unforgiving attention to quarterly earnings presents ever increasing pressure on CFOs to manage earnings and expectations. The Financial Numbers Game provides a clear explanation of the ways in which management can stretch, bend, and break accounting rules to reach the desired bottom line. This arms the serious investor or financial analyst with the healthy skepticism required to drive beyond reported results to a clear understanding of a firm's true performance."e; --Mark Hurley, Managing Director, Training and Development, Global Corporate and Investment Banking, Bank of America "e;After reading The Financial Numbers Game, I feel as though I've taken a master's level course in financial statement analysis. Mulford and Comiskey's latest book should be required reading for anyone who is serious about fundamentally analyzing stocks."e; --Harry Domash, San Francisco Chronicle investing columnist and investment newsletter publisher

Praise for The Financial Numbers Game"So much for the notion 'those who can, do-those who can't, teach.' Mulford and Comiskey function successfully both as college professors and real-world financial mercenaries. These guys know their balance sheets. The Financial Numbers Game should serve as a survival manual for both serious individual investors and industry pros who study and act upon the interpretation of financial statements. This unique blend of battle-earned scholarship and quality writing is a must-read/must-have reference for serious financial statement analysis." --Bob Acker, Editor/Publisher, The Acker Letter"Wall Street's unforgiving attention to quarterly earnings presents ever increasing pressure on CFOs to manage earnings and expectations. The Financial Numbers Game provides a clear explanation of the ways in which management can stretch, bend, and break accounting rules to reach the desired bottom line. This arms the serious investor or financial analyst with the healthy skepticism required to drive beyond reported results to a clear understanding of a firm's true performance." --Mark Hurley, Managing Director, Training and Development, Global Corporate and Investment Banking, Bank of America"After reading The Financial Numbers Game, I feel as though I've taken a master's level course in financial statement analysis. Mulford and Comiskey's latest book should be required reading for anyone who is serious about fundamentally analyzing stocks." --Harry Domash, San Francisco Chronicle investing columnist and investment newsletter publisher

1 Financial Numbers Game 1Rewards of the Game 2Classifying Creative Accounting Practices 8Plan of This Book 13Summary 14Glossary 15Notes 162 How the Game Is Played 19Accounting Policy Choice and Application 19Fraudulent Financial Reporting 39Cleaning Up after the Game 44Clarifying Terminology 49Summary 50Glossary 50Notes 523 Earnings Management: A Closer Look 57What Is Earnings Management? 58Incentives and Conditions for Earnings Management 60Earnings Management Techniques 62Evidence of Earnings Management 68Effectiveness of Earnings Management 74Is Earnings Management Good or Bad? 82Summary 84Glossary 86Notes 884 The SEC Responds 93The Chairman's Speech 93The Action Plan 96Subsequent Developments 99Enforcing the Securities Laws 108Summary 120Glossary 122Notes 1235 Financial Professionals Speak Out 127Survey of Financial Professionals 129Survey Results 133Summary 156Glossary 157Notes 1586 Recognizing Premature or Fictitious Revenue 159Is It Premature or Fictitious Revenue? 160When Should Revenue Be Recognized? 165Detecting Premature or Fictitious Revenue 185Checklist to Detect Premature or Fictitious Revenue 191Summary 193Glossary 194Notes 1967 Aggressive Capitalization and Extended Amortization Policies 201Cost Capitalization 202Detecting Aggressive Cost Capitalization Policies 214Amortizing Capitalized Costs 220Detecting Extended Amortization Periods 226Checklist to Detect Aggressive Capitalization and Extended Amortization Policies 229Summary 231Glossary 231Notes 2338 Misreported Assets and Liabilities 237Link with Reported Earnings 238Boosting Shareholders' Equity 239Overvalued Assets 240Undervalued Liabilities 259Checklist to Detect Misreported Assets and Liabilities 268Summary 271Glossary 272Notes 2759 Getting Creative with the Income Statement: Classification and Disclosure 279Current Income Statement Requirements and Practices 280Reporting Comprehensive Income 292Creative Income Statement Classifications 295Creativity with Other Aspects of the Income Statement 304Summary 311Glossary 312Notes 31310 Getting Creative with the Income Statement: Pro-Forma Measures of Earnings 317Recasting the Bottom Line: Pro-Forma Earnings Measures 318Summary 339Glossary 340Notes 34111 Problems with Cash Flow Reporting 345Reporting Cash Flow 347Problems with Reported Operating Cash Flow 354Using Operating Cash Flow to Detect Creative Accounting Practices 370Checklist for Using Operating Cash Flow to Detect Creative Accounting Practices 373Summary 373Glossary 375Notes 377Subject Index 379Company Index 391