Apparently, an asset puts money into the company coffers, while liabilities draw off and drain the latter. Therefore, in cases of attempts to shift liabilities to assets, just like what the account managers did to World Com, indeed reflecting an increase revenue and subsequent decrease in expenses, as well as increase in assets, but, the cash was streaming out of company coffers. This is what they usually call capitalization on liabilities or outflow (Pratt, 2003; Kiyosaki and Lechter, 2002).
The ability to read, understand, and interpret the financial statements is a key element of financial statement analysis, which results are in turn used as the basis for taking steps towards financial decision and company valuations (Pratt, 2003; Comiskey & Mulford, 2002).
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