财务报表分析 第十版答案 第六章 (部分).docVIP

Exercise 6-1 (25 minutes) a. Cash xxx Gain on disposition* xxx Net assets of discontinued operations xxx * (A loss on disposition would be recorded as a debit) b. Income (expense) related to discontinued operations include the operating profit (loss) recorded prior to sale and the gain (loss) on sale. These are reported net of applicable tax. When estimating future earning power, the results from discontinued operations should not be treated as recurring. This is important for an assessment of the permanent income of a company. Separately reporting discontinued operations allows the analyst to view the results of operations without the segment that will not be ongoing. As a result, the analyst can better assess the permanent component of income, for which results of discontinuing operations will be excluded. Exercise 6-2 (30 minutes) a. By the use of reserves, a company can allocate costs in excess of actual experience in the current period, based on estimates of additional costs in the future, or even based on the simple possibility of further costs in the future. Then, in later periods, actual costs can be written off against the reserve rather than reported as expenses in the companys income statement for those periods. The advantage to the company is that earnings trends can be smoothed, and a cushion for future earnings can be built up during good economic years for use during leaner periods. To the extent that stability and predictability of earnings are market virtues, the companys common stock might be accorded a higher multiple for these efforts, in effect lowering the cost of capital to the company. The use of reserves both poses problems for the analyst and conflicts with some basic accounting principles. These include: (1) Use of reserves contradicts the matching principle, by which revenues and related costs should