In "Making Bad News Pay," BusinessWeek, September 3, 2001, Pallavi Gogoi described David W. Tice, a professional stock-market bear. Tice sells scathing research reports to institutional investors describing why the stock prices of some companies could be headed down. Tice finds his targets by going over balance sheets, income statements, and cash flow statements with a fine-tooth comb. He looks for misleading numbers of bogus information that, once uncovered, result in an abrupt decline in the stock price.

For example, Tice has focused on Amazon.com. According to the BusinessWeek article, Tice is convinced that Amazon's business is flawed because of the difficulty of translating rising sales into profits. Tice also suggests that Amazon's growth in its core business of books, music, and videos has slowed to a crawl, and that it now emphasizes its faster-growing consumer electronics business. He calls it a classic case of "Don't look over here, look over there."

Instructions

a. Identify and describe at least four tools of analysis that Tice is likely to use when evaluating companies to include in his research reports.

b. Describe how the tools you identified in part a would help Tice come to the conclusions discussed in the BusinessWeek article about Amazon.com.