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Projecting as many of the key income, cash flow, and balance sheet components as a percent of projected revenue helps to ensure the internal consistency of the model.

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Common size financial statements are useful for comparing businesses of different sizes in the same industry at different points in time.

In order to normalize the historical financial data of the target firm, it may be necessary to subtract large increases in and add back large decreases in non-recurring expenses from operating profits.

Improper revenue recognition is the most common form of financial reporting fraud.

Empirical evidence suggests that discounts have declined in recent years.

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