What is the main problem in using a balance sheet to provide an ...

[itsmyluck]

What is the main problem in using a balance sheet to provide an accurate assessment of the value of a company's equity?
◦ The balance sheet does not accurately represent the book value of assets held by the company.
◦ Valuable assets such as the company's reputation, the quality of its work force, and the strength of its management are not captured on the balance sheet.
◦ Knowing at a single point in time what assets a firm possesses and the liabilities a firm owes does not give any indication of what those assets can produce in the future.
◦ The equity shown on the balance sheet does not reflect the market capitalization of the company.

[lgoldst9]

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[itsmyluck]

Thank you!

[lgoldst9]

Always glad to help...