CONCLUSION
By closely examining the underlying values reflected in the balance sheet, this chapter emphasizes the need for a critical, rather than a passive, approach to financial statement analysis.
The discussions of return on equity, goodwill, and leveraged recapitalizations underscore the chapter’s dominant theme, the elusiveness of “true” value. Mere tinkering with the conventions of historical cost cannot bring accounting values into line with equity as economists define it and, more to the point, as financial analysts would ideally like it to be. Market capitalization probably represents a superior approach in many instances. Under certain circumstances, however, serious questions can be raised about the validity of a company’s stock price as a standard of value. In the final analysis, users of financial statements cannot retreat behind the numbers derived by any one method. They must instead exercise judgment to draw sound conclusions.
Source:
Fridson M., Alvarez F.. Financial Statement Analysis. John Wiley & Sons, Inc.,2002. — 413 p. 2002
More financial literature on Economics.Studio
More on the topic CONCLUSION:
- Conclusion
- Conclusion
- Conclusion
- Conclusion
- Conclusion
- Conclusion
- Conclusion
- Conclusion
- Conclusion
- Conclusion
-
Conflictology -
Ecology -
Economy -
Finance -
History -
Law -
Medicine -
Philosophy -
Religious studies -