The impact of balance sheet and income statement corrections on ratios in the financial analysis process

Many people and institutions (like managers, banks, investors and state) benefit from financial statements. Therefore information presented in the financial statements must be correct, reliable and comparable. For this purpose, various accounting standards are formed by the authorities and financial statements of the companies are controlled by external auditors. However, the financial statements of those companies, that are outside the scope of external audit and that do not or falsely implement the standards, must be adjusted to reflect the real situation. Thus, some corrections (transference-purification) are made on financial statements before the financial analysis. This study examines the corrections made by financial analysts and the impact of these corrections on the analysis results, by using the ratio analysis method. As a result of the corrections; liquidity, financial structure, activity rates and profitability ratios change significantly, which gives decision makers the opportunity to make a more accurate and realistic evaluation of the company. Keywords: Financial Analysis, Ratio Analysis, Ratio, Correction, TransferencePurification.