determination of earnings quality
Earnings are extremely important to a publicly traded
company and the creditors and investors of that company. However, looking at
earnings without regard to the quality of those earnings is hazardous to the
health of creditors and investors.
1. Why is
the determination of earnings quality and persistence important?
2. Explain
recasting of the income statement and give three examples of items that are
recasted.
3. Explain
adjusting of the income statement and give three examples of items that are
recasted.
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