Resumo de Financial Fine Print (uncovering A Company's True Value)

Investment is a very difficult & complex subject, due to lot of uncertainties & risks involved therein. Any investor makes decisions, after a thorough study & research, of the current & past performance of a company. He expects that the details given about the company are right, truthful & accurate. But in many cases, companies provide inconvenient & unpleasant information as footnotes, & knowingly give it in a very fine print, making it very difficult to read. The intention of the company appears to be clear, that the investor should ignore these details, or find it very hard to locate, read & understand this type of information, so that he is misled in this matter. In ten Chapters of this book, the author states that, the foot notes of financial statements should be read, understood & analyzed, so that we can ascertain the correctness of the total & main information, make an assessment about the accounting tricks & the hidden bad news. If we know where & how to look, the true prospects of the company can come to light. Some of the important points in the foot notes, are common with various companies.
In one of the important Chapters of the book, it is stated that the analysis is incomplete, without study of the five foot notes for taxes, derivatives, the others, legal issues & segment breakdown. The foot note on taxes is said to be one of the reliable indicators, whether the financial statements are shown, as if they are better than, they really are. Companies may report two sets of results, one for investors & the other for revenue service, the one for the investors making the company look better. Large differences between the two, should be examined. Here, we may also focus on company's effective tax rate, trend for deferred tax assets & liabilities. Most of the companies do not give adequate information about their derivatives contracts, so the investors can't find out what is really happening. Interpretations of these is very complicated. The others includes, other income, other expenses, other assets, other liabilities etc., & these give important clues about a company. The things which form part of this category, can change from period to period, & many things can get hidden here. Regarding legal issues, in case there is a large verdict against a company, when sued by the customers, contractors, employees or investors etc., the stock of the company may fall drastically. The investor should therefore be aware of these issues. With segment breakdown(i.e. unit wise)information, the investor can get a complete picture of the status of the company. Every serious investor, & person connected with investment, should read this book as a practical guide.

Resumos Relacionados