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In: Accounting

What decisions on the basis of this information, including the same data for the previous period...

What decisions on the basis of this information, including the same data for the previous period and possibly two years prior, can investors or shareholders take (focus on future growth, evolution of risk level, or volatility of future earnings and evolution of the 'time horizon of visibility' into the firm's future)?

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Expert Solution

Investment involves making of a sacrifice in the present with the hope of deriving future benefits. Two most important features of an investment are current sacrifice and future benefit. Investment is the sacrifice of certain present values for the uncertain future reward. In order to earn the reward it is very important for investor to understand the future prospects regarding the future projects, future market trends of the portfolio of the company, asses the risk with the investment, time period for which investor is willing to invest, also how much volatile is the investment along with understanding the same investor has also to asses the past performance of the company and understand what were the factors responsible for the past performances. If as per the investor if future prospects of the industry the firm is dealing looks bright and all the ratios of company are within proper limits then investor can make an investment decision.

ekkarill92 answered 10 months ago
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