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Arista Corporation Quality of Earnings Case Study

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Please answer the mini case study questions on Arista Corp.

Arista Corporation
Quality of Earnings
Case Study

On the next three pages you will find Arista Corporation's income statement and selected footnotes which have been condensed.

1. Look these three pages over and note what you feel are one-time or infrequent items.

2. Place these items on the Atrista Corporation "Reconciliation Worksheet" which you will find four pages back.

3. Add up your results on the worksheet to arrive at Arista's true earnings figure.

4. Comment on your findings. What are the implications of your analysis to a banker or investment manager who might be reviewing your work?

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Your tutorial is 385 words plus a reconciliation of permanent versus transient earnings in Excel.

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Arista Corporation
Quality of Earnings
Case Study

On the next three pages you will find Arista Corporation's income statement and selected footnotes which have been condensed.

1. Look these three pages over and note what you feel are one-time or infrequent items.

2. Place these items on the Atrista Corporation "Reconciliation Worksheet" which you will find four pages back.

3. Add up your results on the worksheet to arrive at Arista's true earnings figure.

4. Comment on your findings. What are the implications of your analysis to a banker or investment manager who might be reviewing your work?

See Excel attached for reconciliation worksheet. Click in cells to see computations.

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The analysis of the quality of ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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