KIC000069 - Financial Risk (continued) .;. Before...

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Unformatted text preview: Financial Risk (continued) .;. Before performing an analysis of the Financial statement. the anal ....st must determine if the industry in which tile company operates has any special accounting pracuces. such as those in the insurance industry, :.- If ~O.an :analyst should become familiar whh itldu~1ry practices. O{. Moreover, the analyst must review the accounting policies to determine whether management is employing liberal or ccnservarive policies in applying generally accepted accounting principles (GAAP), .;. Since historical dam. are analyzed, the analyst should recogniu: that companies adjust prior years' results to accommodate discontinued operations and changes in accounting that can hide unfavorable trends. "jr This can be done by assessing the trends for the company's unadjusted and adjusted results. Financial Risk (continued) .:. Net Assets ;.. An important ratio is net assets La total debt....
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KIC000069 - Financial Risk (continued) .;. Before...

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