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Interpretation of financial statements
Limitations of financial statements and
ratio analysis
5.1 Overview of limitations
No
predictive
Year-end value Ignore
figures not management
representative action
Limitations of
financial statement
analysis
Distortion by Window
related party dressing by
transactions Different management
accounting
policies
Illustrations and further practice
More detail on limitations of financial statements and ratio analysis can be found
in section 7 of Chapter 21.
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