Explain why an analyst attaches great importance to evaluation of the income statement.
Answer to relevant QuestionsWhat are the two basic economic concepts of income? What implications do they have for analysis?Explain what special items are. Give three examples of special items.Define income. Distinguish income from cash flow.Identify the conditions that are usually required before a sale with right of return is recognized as a sale and the resulting receivable is recognized as an asset.Distinguish between the intrinsic value and the fair value of an option.
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