Jason,

Brilliant write up. Truly harmonizing accounting knowledge with financial statement analysis. May like to add on a couple of things here:

1. Accounts receivable/Accounts payable quarter on quarter movement - Never underestimate the AR/AP line. Cash flow drives company operations and while having a large AR beefs up your assets on the balance sheet you might wonder whether the company is doing a good job of recovering the receivables. Similarly I had seen nice balance sheets but really ugly looking cash flow statements when doing stock picks.

2. Other operating expenses/Admin and general expenses - Explore this line as a proportion of your total expenses. Not a standard guideline but if this line is exceeding 30% you might be wondering of the glorious items parked in this financial statement line item.

3. Accounting for investments (in a subsidiary/JV/associate/financial instruments) - Too often I have seen companies getting a little too creative with the accounting under FRS 39 and some analysts not even knowing the difference between the accounting treatment between a subsidiary and an associate. As an analyst it will not do some harm in reading the FRS 39 literature in understanding the 4 basic financial instrument asset classes.