Commercial Collections Blog

Burt and Associates - Commercial Debt Collection / Blog / How real are Earnings on Wall Street?

How real are Earnings on Wall Street?

A corporation’s earnings report can have a devastating effect on its stock price if earnings just barely fail to meet the company’s projections. If a company misses its earnings estimates by only a penny a share, investors may hammer its stock, thinking that the company would have used every accounting trick in the book to meet the projections. Therefore, the reasoning goes, missing projections by a penny a share must mean trouble’s a-brewing. Such pressure from Wall Street can force companies to do anything to meet short-term earnings targets, possibly at the expense of longer-term growth. In one survey of more than 400 financial executives, about 80% of the respondents said that they would cut discretionary spending on things like research, development and hiring in order to rein in costs, meet projections and satisfy Wall Street’s demands for hitting quarterly earnings targets.
Some have suggested that companies should stop putting out estimates of quarterly earnings and perhaps instead provide more meaningful communication for investors to understand longer-term business strategies

Commercial Collection Topics

Accounting Tactics to Increase Short-Term Earnings Describes what can be done with accounting tactics to boost short-term earnings. Uses Enron as an example of a worst...
Raising Capital Though Bad Debt Bankers may offer include convertible debt. An important decision for a business wanting to raise capital is that of choosing...
Top 3 things to consider when placing accounts for commercial collections Top 3 things to consider commercial debt collection; Getting Paid!, Protecting Your Company’s “BRAND” and Licensing, Bonding, and Insurance...
Days Receivable Outstanding DSO Calculation DSO Forecasting Tool and Chart Tool. In tough economic times, it is particularly important to carefully manage your A/R. Unfortunately,...
Related Terms:
Posted by | May 12, 2013

Debt Collection News