What are common- size financial statements? How are they calculated? Why are they a valuable analysis tool?
Answer to relevant QuestionsDefine financial ratio. What two conditions must exist for a ratio to be useful in financial statements analysis?Why should a forensic accountant consider footnotes in financial statements?What are common “tells” or communication characteristics that appear in Management’s Discussion and Analysis that might alert a forensic accountant to financial statement deception?1. Which of the following describes the result of calculating a financial ratio?a. An asset as a percent of revenueb. The numerator expressed in terms of one unit of the denominatorc. Net income as a percent of cash flowd. ...Go to www.sec.gov and obtain WorldCom’s Form 10- K405 for 2001. Using the income statement found on page F- 2 and the balance sheet found on page F- 3 of the 10- K405 form:a. Prepare a common- size balance sheet and ...
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