For example, the fiscal year at FedEx ends at the end of May, while at UPS the fiscal years ends at the end of December. This makes for a difficult comparison. For example, fuel prices escalated rapidly in early 2008. Comparing a FedEx FY09 and UPS FY08 would be very difficult, given that one of those statements would reflect the fuel price increase and the other would not. There are also limitations to accounting analysis as a whole. At best, these forms of analysis are only as good as the financial statements from which they are produced. A large number of variables contribute to those statements, including accounting policy, accounting accuracy (or lack thereof), outdated information and changes in the accounting standards (NetTom, n.d.)

Changes in accounting policy or accounting standards can distort data year-over-year, which makes direct comparison more difficult. In this case, for example, Thomson Reuters trades on the New York Stock Exchange as well as London and Toronto, its home exchanges. This means that it must produce statements to three different accounting standards. The one produced to U.S. GAAP will be directly comparable with that of FedEx, but the one produced to the international or Canadian standards will not be directly comparable because of the differences in those standards from GAAP.

It is imperative that an analyst understands the limitations of the financial statements. The statements are produced in order that some degree of consistency exists between the financial statements of publicly-traded companies. However, there remains considerable leeway with respect to the accounting treatment of many components.

Moreover, these analyses only present one picture...

This snapshot, while valuable, is incomplete and should never be used exclusively to determine value. The numbers contained within the statements do not indicate value unless the analyst understands the story behind the numbers. In this case, Thomson Reuters nearly doubled in size in 2007. The details of that transaction will help to explain some of the outcomes on the financial statement, like the decline in receivables and the disappearance of inventory. A full understanding of each firm's operations is necessary to understand the value, as well as news story and other information that can help to provide context. The financial statements are submitted to the SEC with pages of notes attached to them -- the analyst must take those into account, but in the notes the numbers are explained and context provided. Only then can the analyst hope to derive true value.
Works Cited:

MSN Moneycentral: FedEx Corporation. (2009). Retrieved November 3, 2009 from http://moneycentral.msn.com/investor/invsub/results/hilite.asp?Symbol=FDX

MSN Moneycentral: Thomson Reuters. (2009). Retrieved November 3, 2009 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=TRI

Loth, R. (n.d.). Financial ratio tutorial. Investopedia. Retrieved November 3, 2009 from http://www.investopedia.com/university/ratios/profitability-indicator/default.asp

No author. (2007). Common Size Financial Statements. NetMBA. Retrieved November 3, 2009 from http://www.netmba.com/finance/statements/common-size/

No author. (n.d.) Session 15: Limitation of Ratio Analysis. NetTom. Retrieved November 3, 2009 from http://cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page26.htm