One of the main tasks in constructing the performance measures is to understand “what goes where,” i.e. how to extract information from the financial statements and put it into the correct fields in the calculators. Companies have a lot of flexibility in how they report various items, and so a big part of the task at hand is to understand the terminology and convert it into a common language. Without the common language, you would not be able to compare companies.
In the FTS Financial Statement Analysis Module, the calculators associated with each topic provide the common language. So the main task is to learn what information reported by the companies is transferred into which field in a calculator. Of course, as you do this, you start to see what is important to the company: the decision to report something as a separate line item as opposed to a general item like “Other” implies that the item has some special significance for the company.
Once you have worked with several different types of companies and gained experience, you will start to recognize the patterns. To help you gain that experience, we have developed what we called the Self-Assessment Dataset, and this leads you through the calculators in a systematic way.
The best way to demonstrate this is again by example. So let’s turn on Self-Assessment mode by clicking the Self-Assessment icon in the toolbar (circled in red):
You can also enable this from the Self-Assessment menu item. As soon as you do this, the icon will turn green; you will see a calculator with red cells, and the Self-Assessment tab, as follows:
The Self-assessment tab gives you information on how to solve the problem. Once you have gained experience, you can reduce the amount of information and see if you can work through the problem by yourself. You can even reverse this sequence: try and solve it without any hints, and then use the hints of you get stuck.
