This was one of two textbooks used in a financial statement analysis course I took for my MBA. Most chapters are down-to-earth and as a whole the book is well-written.

The other text we used was Penman's "Financial Statement Analysis and Security Valuation" which was also a great resource as far as gaining a basic understanding of the mechanics of financial statements and how to build a valuation model.

I contrast the two books because while Penman provides a run-down of several different models analysts can use (and does a good job of arguing for the Residual Income Model of valuation model as being the best), Palepu delves into the implications of companies' choices of accounting methods and provides more insight into what different kinds of businesses should look like in terms of their financial statements.

The cases at the end of each chapter add a lot of value to the text because they get students to focus on the specific issues detailed in each chapter. By picking apart different companies' financial statements we learned to use financial statements to assess the success or failure of companies' efforts to carry out their business strategies.

I rate it "Good - 4 stars"