In the best possible taste
In the best possible taste – as Kenny E. Would say rapidly crossing his legs:eek:
Please be patient and don’t take my head off before reading and appreciating carefully.:rolleyes::rolleyes:
Please stop jumping up and down like a ‘greedy’ trader about profit. I don’t care as it is no judge of a company (whether it be Virgin, BA, Boeing, Airbus , Rolls Royce or a Dell Boy Trotter).:eek:
What is “Profit” – a declaration in “The Income Statement” formerly known as the “Profit and Loss”, at an electronic instant in time of the Income minus the Outgoings. One electronic instant it could be sky high (no pun Pete) and the next it could be showing 0 or minus figure having swallowed up the company overdraft.
Well the new breed of accounting graduates are riding shiny new chargers which state in the code of ethics that adherence to pure Profit as a yardstick is a “dead duck”.:eek:
Therefore accuracy in the “Income Statement” is paramount and must be verifiable.:)
More interestingly is the close scrutiny of the “Balance Sheet” – tangible and intangible assets of the company (e.g. the recently government controlled and funded banks, had virtual assets, or zero value assets in the sub prime scandals. “Where is the property that this 3 times around mortgage is secured with?” “I think it blew down a few days ago or there’s the pin on the map where it’s supposed to have been.”) – when and how were the assets valued?
🙂
Of paramount importance is the “Cash Flow Statement” – how does the company manage it’s money from day to day. Too big a balance is as serious as too little a balance to pay the bills.:)
Of further interest to us new ‘bean counters’ is the harmonising in the developed world of IFRS accounting standards (not Tax) and the sorry tale is that the USA have asked for a further extension at least up to 2017 before they move to harmonise their accounting standards. US works on a rules based system (easy to tick boxes and sweet talk auditors) and in contrast IFRS is all about Good Governance and being principles based.
The delay:diablo: in legislation being passed to “Ring Fence” banking operations from riskay horse trading with banking customers’ (as opposed to gamblers’) money is not going to stop ethical accountants reporting in special notes to the accounts on any ‘shady situations’ to the audit committee (usually composed of non executive directors of the company whose remit is to keep a ‘beedy’ eye on whether good governance prevails and to monitor internal audit and take heed of all external audit observations and critiques).
My faith stays with BA as a favourite since they do appear to manage the financial situation with good governance.:D
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