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- 2011-7-11
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2#
发表于 2011-7-11 17:40
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mbolzicco is correct. Best practice when using mixed ratios that involve the income statement and balance sheet is to use average balance sheet figures. Why?
The income statement reflects cumulative activity over a period of time (between fiscal years), whereas the balance sheet is a snapshot at a single point in time (FYE). The use of balance sheet figures that aren't averaged exposes you to the risk that extreme changes in assets or liabilities that may have occurred at the beginning/end of a FY misrepresent activity throughout the FY. It would be quite easy to game these types of financial metrics.
I'll wager it's this type of logic that leads the Treasury Stock Method to require weighted-average basic common CSO for basic EPS, rather than simply basic common CSO at FYE.
Anyway, just think of income statement figures paired with average balance sheet figures as a more credible alignment of time periods.
Just my $0.02. |
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