1-0 Some Financial Analysis Tools Bob Jensen Emeritus Professor of Accounting Trinity University in San Antonio 190 Sunset Hill Road Sugar Hill, NH

1-1 Accounting Theory n Overview Local Link ---..\..\theory01.htm n Fraud Local Link ---..\..\fraud001.htm n Electronic Commerce Local Link ---..\..\ecommerce\000start.htm

1-2 Data

1-3 Tagged Data 218 Weight in Pounds United Kingdom Weights and Measures Act 1963 Robert E. Jensen 190 Sunset Hill Road Sugar Hill, NH September 14, :53 p.m.

1-4 Tagged Data 156 Amortization of Basis Adjustment in USD December 31, 200X1 Fair Value Interest Rate Swap ABC Company Paragraph 117 Under FAS 133 Standards Not the Same Under IAS 39 Standards

1-5 XBRL n Think of a set of financial statements as being a library n Think of each piece of data in a set of financial statements as a book in the library.

1-6 XBRL n 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. n The marked up book code allows librarians to place the book among topic-related books in the stacks. n The marked up book code allows patrons to easily find both a given book and related books on a topic.

1-7 XBRL n 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 n The SEC’s tags are in XML extensible markup code that that complies with a business reporting standard called eXtensible Business Reporting Language (XBRL_ n The XBRL tags allow analysts to slice and dice a given report or multiple 10-K reports of multiple companies.

1-8 XBRL n Technology Timeline Local Link ---..\..\XBRLandOLAP.htm n Bob Jensen’s Video Tutorials / Local Link \Video\Tutorials\XBRLdemos.wmv Local Link \Video\Tutorials\XBRLdemos2005.wmv /..\Video\Tutorials\XBRLdemos.wmv..\Video\Tutorials\XBRLdemos2005.wmv

1-9 XBRL n 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. n 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

1-10 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.

1-11 Jensen’s XBRL Tutorials Local Link..\Video\Tutorials\XBRLdemos.wmv..\Video\Tutorials\XBRLdemos.wmv Local Link..\Video\Tutorials\XBRLdemos2005.wmv..\Video\Tutorials\XBRLdemos2005.wmv

1-12 Pivot Table Tutorial Web Link to Excel Workbook Local Link to Excel Workbook ---..\MicrosoftPivots\PivotingTutorial\PivotTableTutorial.xls..\MicrosoftPivots\PivotingTutorial\PivotTableTutorial.xls

1-13 Financial Analysis Software has Evolved over 25 Years n MicrosoftPivotTable Analysis Local Links ---..\Video\MicrosoftPivots\ExcelPivotMicrosoft.wmv..\MicrosoftPivots\MicrosoftInvestorRelationPivots\Year2001\microsoftHistory2001.xls..\MicrosoftPivots\MicrosoftInvestorRelationPivots\Year2001\microsoftWhatIf2001.xls n S&P Core Earnings Local Links --- SPcoreEarnings\core powerpoint ppt SPcoreEarnings\CoreEarningsOilGas.xls SPcoreEarnings\core powerpoint ppt SPcoreEarnings\CoreEarningsOilGas.xls

1-14 Financial Analysis Software has Evolved over 25 Years n fisCal Video Local Link ---..\Video\FinancialAnalysis\fisCal.wmv n S&P Core Earnings Local Links --- SPcoreEarnings\core powerpoint ppt SPcoreEarnings\CoreEarningsOilGas.xls SPcoreEarnings\core powerpoint ppt SPcoreEarnings\CoreEarningsOilGas.xls

1-15 WebLedgers n Webledger Alternatives Local Link ---..\..\webledger.htm n NetSuite-Controller Video Local Link ---..\Video\FinancialAnalysis\NetSuite-Controller.wmv..\Video\FinancialAnalysis\NetSuite-Controller.wmv

1-16 WebLedgers n Great for small and some medium-sized companies n Eliminate the need for buying, updating, and maintaining accounting and related software (payrolls, billing, accounts receivable, inventory ordering, and financial statement analysis and preparation). n Add on options for Customer Relations Management (CRM), Executive Summaries, and Fiancial Statement Analysis.

1-17 WebLedgers n Eliminates the cost of expensive IT staff with typically high turnover and security risks. n Over a million times less likely to have a systems crash. n Data entry from anywhere in the world n Integrates easily with other company databases in a ERP system

1-18 WebLedgers NetLedger Student Team Project Local Link ---..\netledger\NetLedger.doc..\netledger\NetLedger.doc

1-19 Two Types of Financial Analysis n 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. n 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.

1-20 Jensen’s XBRL Tutorials \Video\Tutorials\XBRLdemos.wmv..\Video\Tutorials\XBRLdemos.wmv \Video\Tutorials\XBRLdemos2005.wmv..\Video\Tutorials\XBRLdemos2005.wmv

1-21 The End