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Can you find foreign companies with a different presentation of financial statements (Balance Sheet classifications and...

Can you find foreign companies with a different presentation of financial statements (Balance Sheet classifications and SCF) than the US companies? Do you realize how analysts need to understand these differences so that they compare apples with apples?

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Answer #1

Taking an example of Huawei Investment & Holding Co., Ltd. , which has a different financial presentatation of the balance sheet as well as statement of cash flows as compared to the US companies. The company follows direct method of SCF.

The analysts may use different financial tools like comparative analysis, trend analysis, horizontal analysis and vertical analysis to compare the financials of the company from the US company. Apart from this one of the biggest tools which can be used by the analysts to compare the performances of the companies is through financial ratios. Different financial ratios like activity ratio, short term ratios, solvency ratios, profitability ratios and market ratios can be used to compare these.

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