As value investors, we have been taught to place greater emphasis on the balance sheet rather than the income statement during the course of our analysis. The argument is that earnings are more easily manipulated and less reliable as a true representation of a company. Indeed, operational earnings are often distorted by fair value gains, impairment charge or even which account is depreciation expenses charged under. However, there are reasons why the balance sheet is not perfect either, even if little has been said about it. Like the income statement, albeit to a lesser extent, the balance sheet is susceptible to window dressing. Unsurprisingly, window dressing can skew the financial perception of a company. This is something I realised while analysing Pico Far East Holdings Limited some time ago. Looking at the annual balance sheet numbers, a balance-sheet-only indicator like debt-to-equity ratio seems to be highly favourable due to low ......