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Improved Fundamental Accounting Concept Analysis Prototype

Programming is so much fun!  I showed an analysis tool prototype in another blog post.  That was created by copying and pasting data from my database into Excel.

Here is an improved version of that prototype.

That is still a working prototype.  It is still rather rudimentary.  Rather than going across the page, this goes down the page so that it is easier to see the information for each entity.  I am showing all 6,751 entities in my set of 2014 10-Ks.

This does not work yet, but I put a combo box on the form to let the user of the form select any of the fundamental accounting concepts.  I think I am also going to add the 35 financial ratios that I can get from Table 3 of the financial statement fraud prevention and detection paper.

Take a look at the chart.  It is no wonder Warren Buffett has so much money.  BERKSHIRE HATHAWAY INC. has net cash flow that far exceeds the second best public company.  Scroll to the bottom and you see VERIZON COMMUNICATIONS INC at the bottom of the list.  (Note that you can click on the Line number and go to the SEC filing page.)

Note the column "Consistent".  If the information was consistent with other information (i.e. the fundamental accounting concept relations of the report were consistent), there is a green OK in that column.  If the information is inconsistent, there is a yellow INCONSISTENT.  For that specific reported fact, there are 316 out of the total 6,751 entities that provided information which is nonsense.  By "nonsense" I mean the information is inconsistent with other information or the reported fact could not be located at all.

I find it amazing that it is now so easy to query every financial report in the EDGAR system.  All we need now is to keep improving information quality.

Posted on Sunday, April 12, 2015 at 08:33AM by Registered CommenterCharlie | CommentsPost a Comment

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