How might transitory earnings influence earnings quality

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Assignment:

1) What are transitory earnings and why would a user of financial statements want to distinguish them from permanent earnings?

Hint - In class this may have also been referred to the term "Extra-ordinary items".

How might transitory earnings influence "Earnings Quality"?

Provide at least one example that would be considered a transitory earning

2) Briefly describe the concept of a "moat" and why this is an important concept to bear in mind when designing a business model.

Provide one example of a company that seems to have created a strong moat to defend its competitive positioning within the market. Support your answer with rationale as to why you have made this conclusion.

3) Based upon your Dupont analysis of Alpha and Bravo companies which of the 2 companies appears to be stronger performer?

How did you determine this? Be sure to provide specific metrics to support your answer.

Reference no: EM133223930

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