Magazine

Table: The Pros and Cons


THE PROS...

-- With financial statements more closely reflecting economic reality, capital is directed to the most deserving enterprises, enhancing efficiency and stimulating growth

-- The constant assessment of assets makes it harder for managers to conceal damaging losses, so money-losing businesses are more quickly identified and closed down

-- Underutilized assets are sold to companies that value them more highly

...AND CONS

-- Investors can be frightened off by financial statements that fluctuate wildly with market conditions

-- Using iffy projections of the future to value assets and income makes financial statements less reliable and less comparable

-- Managers can overstate current values of assets and understate liabilities, potentially misdirecting investment

Data: BusinessWeek


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus