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Essay On Trouble Lies Ahead

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trouble lies ahead. Often trouble can be spotted long before the stock market has noticed. I am surprised by the number of times a financial report has kept me away from a poor-performing stock.
Unfamiliarity and intimidation are the biggest obstacles to overcome when reading a financial statement. Most people have jobs that do not require reviewing the financials of their company. They have little interest in reading them on their own. The view is, why bother when there is not much I can do about it, if trouble is spotted? Plus, whistle blowers are unfavorably looked upon in any business organization. The general attitude is, “If I did read the financial report and it was bad, that would be discouraging, maybe even mind blowing. It …show more content…
Many think knowing how much money they have in the bank is good enough. And if trouble arises, they depend on their expense cutting or sales skills to work their way out of trouble. Most small business people prefer to have a positive attitude and not be looking for trouble. I once had a business partner who was great salesperson, but when I tried to review our financial reports with him; he would immediately become frustrated and many times angry in effort to stop me from reviewing them with him. Not reading financials, the business owner could be the last to know their business is going broke. Years ago, I had an accounting teacher who said that if a business owner doesn’t pay attention to accounting, it is easy to go bankrupt. By the same token, paying attention to accounting and responding makes it hard not to be successful and nearly impossible to go bankrupt. I have learned over the years if I pay attention to financial reports, I can began to learn to develop performance indicators which will help me monitor my businesses’ activities—accurately assessing my businesses’ progress. The same is true reviewing companies’ financial statements; one begins to have better understanding and sense how financial results affect their stock’s

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