Unformatted text preview: tatement Analysis – Problems and Solutions
Differences in accounting principles Some investors attempt to reframe foreign financial
Some statements to a more familiar GAAP.
statements Another approach is to use a stripped down measure of
Another earnings that excludes items most affected by
diversity Some firms alleviate some of financial statement users ’ problems in their convenience translation.
problems In summary, as the use of IFRS becomes more
In widespread, many of these problems will abate.
widespread, Foreign Financial Statement Analysis – Problems Foreign Financial Statement Analysis – Problems and Solutions
Business environment differences
Differences in culture and economic environments have an impact on the relevance of ratios. A study of companies in Japan, Korea, and the U.S. found significant differences due to business environment. For example, Japanese and Korean companies borrow much more on a shortterm basis than U.S. companies, leading to lower cu...
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- Summer '13
- Balance Sheet, Generally Accepted Accounting Principles, Foreign Financial