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Unformatted text preview: rrent ratios. Foreign Financial Statement Analysis – Problems Foreign Financial Statement Analysis – Problems and Solutions Business environment differences Debt ratios also tend to be higher in Japan and Korea because of the sources of financing. Lower profit margins in Japan in the late 1970s, relative to the U.S., can be partly explained by the Japanese companies having their focus on market share as opposed to profits. In summary, an investor needs to be aware of these differences and not forgo potentially profitable investments. An investor must have a good understanding of the business environment and how to identify the best companies in that environment. Restating Foreign Financial Statement to U.S. Restating Foreign Financial Statement GAAP Form 20-F Foreign companies that file non-U.S. GAAP financial Foreign statements with the SEC are required to complete a Form 20-F, with the exception of those that use IFRS. IFRS The Form 20-F reconciles net income and The stockholders’ equity to U.S. GAAP. stockholders H...
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