In the past two years, venerable corporations with real products, real revenues and real profits have repeatedly seen their stock prices massacred, either because they failed to meet quarterly earnings
projections or because they were thought to operate in mature industries where spectacular growth was no longer possible.
data for a comparison group--a nontreatment group with otherwise similar attributes-are tracked over the same period.
Because eliminating the earnings
test will generate additional earnings
for these groups, it will generate more spending as well.
The adjustments reflect changes in the subsidiary's undistributed earnings
and profits rather than its taxable income.
CHICAGO -- Earnings
are the single most important metric for a company.
305-5(a), under which participation in corporate growth includes a right to receive (1) distributions of current earnings
and (2) proceeds on liquidation.
that it had created a new method for calculating corporate operating earnings
Since most businesses, including metalcasters, have total value in excess of their net assets, this approach normally is used only in situations where the business is losing money or its earnings
do not support its net assets.
The issue is whether the SE earnings
reported on M's 1997 Form 1040, for which he received no cash in 1997, are earnings
in determining whether he had excess earnings
that would reduce his Social Security retirement benefits.
Indeed, there are countless examples of growth companies that generated impressive increases in earnings
per share for a sustained period while operating cash flow was negative or negligible before suffering catastrophic earnings
disappointments, costing shareholders billions of dollars in losses.
This is why we consider this subject so important that we are featuring a special report in this CPA Letter on Quality of Earnings
, to communicate to all our members on their role in this process, whether they are part of the preparer, auditor, regulatory, government or academic communities.
the leading network of financial events for individual and institutional investors, will be providing conference call webcasts, earnings
dates, and earnings
releases for Dell Computer Corporation (Nasdaq: DELL), Internet Capital Group (Nasdaq: ICGE), Walt Disney Company (NYSE: DIS), and Walt Disney Internet Group (NYSE: DIG) on Wednesday, November 8th and Thursday, November 9th, 2000.