Capital market participants purchase financial assets (e.g., bonds, preferred stock, common stock, etc.) in exchange for rights to future payoffs (e.g., interest, principal, dividends, etc.). This implies that the price assigned to a particular financial claim is a function of the amount, timing, and risk of the related stream of payoffs. A firm’s historical financial statements (including the footnotes and ancillary disclosure) are an essential source of information for developing beliefs about these phenomena (i.e., amount, timing, and risk). Moreover, the basic financial statements suggest an obvious approach for converting one’s beliefs into explicit estimates for future payoffs (i.e., a set of pro-forma financial statements). Taken together these observations imply that anyone with an interest in valuation (e.g., analysts, investment bankers, managers responsible for capital budgeting and corporate acquisition policy, stewards of actively managed funds, etc.) is also interested in financial statement analysis. In this course we focus on the role that financial statement analysis plays in the equity valuation process.