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 conclusions concerning the position of an industrial company, he is only examining a set of figures, many of the most important of which merely express the opinion of the Board and management, subject to examination necessarily limited in scope by the auditors.

It may be possible to check the value of the Board's opinion by looking up its members in the Directory of Directors, seeing what are the other companies that they help to rule and investigating their prosperity. Investors are often advised to cultivate this system and it certainly has its value. But it does not take us very far because the best directors are often those who confine their attention to one or two companies, the affairs of which they understand thoroughly, and consequently have no extended record to show whether they are consistent winners. If, nevertheless, the investor determines to use the balance-sheet as a guide he should be careful to study it in comparison with its predecessors; and to facilitate this comparative study balance-sheets might all be drawn up, as some are now, to show the figures of yesteryear, side by side with those of to-day.

It is true that by this method the student may be multiplying the possibility of error, because the policy of the company in the treatment of its arguable assets may have