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Unformatted text preview: Financial Statement Analysis – Foreign Financial Statement Analysis – Problems and Solutions
Some format differences are not problematic because the information is given, just in a different place. However, other format differences are a problem because the information is not provided. It is common in Europe to not provide cost of good sold. This prevents an analyst from determining gross margin percentage and inventory turnover. Foreign Financial Statement Analysis – Foreign Financial Statement Analysis – Problems and Solutions
Extent of disclosure
Disclosure internationally tends to be limited compared to the U.S. where full disclosure is fundamental. Some of the most serious disclosure limitations are information on segments, asset valuation, foreign operations, interim statements, and reserves. Lack of disclosure contributes to the significance of format problems. Globalization of capital markets tends to enhance disclosure as companies attempt to attract investors. Foreign Financial Statement Analysis – Fore...
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- Summer '13