Indian Distribution Sector is not doing well financially. Please justify this and
suggest various measures for improvement.
please give a long answer and fast and correct
Answers
Answer:
This may help you !!!
Explanation:
In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements. They could rely on the numbers to make intelligent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price. And they could make wise decisions about whether to invest in or acquire a company, thus promoting the efficient allocation of capital.
Unfortunately, that’s not what happens in the real world, for several reasons. First, corporate financial statements necessarily depend on estimates and judgment calls that can be widely off the mark, even when made in good faith. Second, standard financial metrics intended to enable comparisons between companies may not be the most accurate way to judge the value of any particular company—this is especially the case for innovative firms in fast-moving economies—giving rise to unofficial measures that come with their own problems. Finally, managers and executives routinely encounter strong incentives to deliberately inject error into financial statements.
In the summer of 2001, we published an article in these pages (“Tread Lightly Through These Accounting Minefields”) designed to help shareholders recognize the ways in which executives use corporate financial reporting to manipulate results and misrepresent the true value of their companies. Enron imploded the following month, prompting the passage of the Sarbanes-Oxley regulations in the United States. Six years later, the financial world collapsed, leading to the adoption of the Dodd-Frank regulations and a global initiative to reconcile differences between U.S. and international accounting regimes.
Despite the raft of reforms, corporate accounting remains murky. Companies continue to find ways to game the system, while the emergence of online platforms, which has dramatically changed the competitive environment for all businesses, has cast into stark relief the shortcomings of traditional performance indicators. This status report looks at the most important developments of financial reporting in recent years, particularly the impact of the new rules governing revenue recognition, the persistent proliferation of unofficial performance measures, and the challenges of fairly assessing asset values.
We also look at the more insidious—and perhaps more destructive—practice of manipulating not the numbers in financial reports but the operating decisions that affect those numbers in an effort to achieve short-term results. Finding ways to reduce such behavior is a challenge for the accounting profession—but one that new analytic techniques can address. Let’s examine each of these problems in turn.