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Detective analysis -identify company. Effective financial statement analysis requires an understanding of a firm's economic characteristics. The relations among various finan- cial statement items provide
Detective analysis -identify company. Effective financial statement analysis requires an understanding of a firm's economic characteristics. The relations among various finan- cial statement items provide evidence of many of these economic characteristics. Exhibit 6.35 presents common-size condensed balance sheets and income statements for 12 firms in different industries. These common-size balance sheets and income statements express various items as a percentage of operating revenues (that is, the statement divides all amounts by operating revenues for the year). A dash for a particular financial state- ment item does not necessarily mean that the amount is zero. It merely indicates that the amount is not sufficiently large for the firm to disclose it. The
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