, identify at least two areas of concern (potential red flags) that may prompt additional scrutiny from savvy investors or analysts who rely on these reports to forecast future firm performance. Pay particular attention to industry averages; ratio analysis; year-over-year growth rates; managerial judgements and estimates; and differences in accounting methodologies (if any).
- Discuss the impact of these red-flags on the reported numbers and the implications for drawing conclusions based solely upon as-reported numbers.
- Identify one (1) potential benefit and one (1) potential drawback to analyzing financial statements within the framework of a representative industry coverage universe.