09 November 2007

NYT: Reading the Tea Leaves of Financial Statements

This article by Floyd Norris in today's New York Times should give pause to every financial analyst evaluating banks and related companies. Numbers lined up neatly in a Balance Sheet column appear authoritative, and most are. But, the assumptions on which these numbers are based can be shaky, especially during times of great change.

We will remember the phrase "mark-to-muddle" accounting.

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