The annual report is considered the most reliable report as it is audited by an independent auditor and must be in compliance with accounting standards. Prospectus and quarterly reports are also considered reliable, since they are issued by the board and in most cases are reviewed (but not fully audited) by an auditor. These documents have certain requirements set by the stock exchange, national law and accounting standards.
Presentations, stock exchange announcements and press-releases are somewhat less reliable, mainly due to the risk of unbalanced, incomplete or biased information.
Analyst reports and reports by professional external experts and consulting firms might be highly valuable because they tend to be more objective and often are peer reviewed.
Articles published in the press or in magazines vary in quality, insight, reliability and objectivity and are often regarded as the least reliable source of information.
Current assets are those that satisfy one or more of the following criteria:
Assets that do not meet any of these criteria shall be classified as non-current.
Current liabilities are those that satisfy any of the following criteria:
All other liabilities shall be classified as non-current.
Knowledge of bookkeeping is important as it provides the analyst with an understanding of the internal coherence of the income statement, balance sheet, statement of changes in owners’ equity and cash flow statement. Furthermore, a thorough knowledge of bookkeeping is paramount in order to carry out a thorough financial statement analysis. Without knowing, say, how capitalising rather than expensing development costs affects the financial statements, the analyst will not be able to make such adjustments, and will, therefore, not be able to make proper decisions.
False – it must be debited the bank account