Presentation of unusual items in financial statements

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Reference no: EM131205330

A. A potential investor or lender may be very interested in evaluating a company's current operations that will continue into the future. If unusual items are not separated, the ratios and analysis will be distorted and will likely be meaningless. The only way around this type of problem would be for the user to manually take the information disclosed in the footnotes and make the necessary adjustments. This is not likely to happen unless the investor or lender is seriously interested in the company and they believe the information is pertinent for their analysis. I prefer unusual items to be separately listed on the financial statements to allow for better forecasts for the future. What are your thoughts on the presentation of unusual items in financial statements?

B. Walt Disney is a great example of a company that is widely known yet has a different income statement and balance sheet information than other companies. For example, when looking at a balance sheet for such a large company you look at the operating expenses to compare from the gross profits. But looking at walt disney that is not an area where you will find a figure because there is not a cost when comes to the operating expenses directly. I did notice that there was a consistent drop in numbers on the income statement, do you feel that a company can take losses and yet still be successful in the end? Explain your thoughts

Reference no: EM131205330

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