Financial Statement Analysis

1.5. What are the purposes of (a) the income statement, (b) the balance sheet, (c) the statement of cash flows, and (d) the statement of stockholders' equity? 1.6. Explain the importance of the notes to the financial statements. 1.7. What causes an auditor's report to be qualified? adverse? a disclaimer of opin- ion? unqualified with explanatory language? 1.8. Why is the management discussion and analysis useful to the financial analyst? 1.9. What is a proxy statement, and why is it important to the analyst? 1.10. Briefly describe the differences between the accrual basis of accounting and the cash basis of accounting