OBAMA PUMMELING BUSINESSES Obama never passes up a chance to demonize businesses. Often, he misleads the public into thinking businesses are making huge profits without sharing the success with employees. The problem.....one cannot evaluate a businesses success by reviewing the Income Statement alone. Inclusion of the Balance Sheet is absolutely necessary to evaluate financial results. For example, if a small oil company achieved a billion dollar profit, but found it necessary to replace a 1.5B offshore rig in the same year, Obama would focus on the billion dollar profit reflected in the Income Statement. First problem, the purchase of the 1.5B oil rig would not be recorded as an expense in the Income Statement, it would be recorded in the Balance Sheet as a Fixed Asset and incrementally expensed in the Income Statement over the life of the asset. In this case, cash flow for the company would have been negatively impacted by 500M even though the Income Statement reflected a significant profit for the year. Second problem, the negative cash flow(500M) for the year may have reduced the companys acid test ratio measuring the companys quick assets to current liabilities to below 1:1 which indicates the company is not financially solvent. This would negatively impact the companys ability to borrow money and their stock prices would tank. My point is, Obama is oversimplifying businesses financial results to advance his CLASS WARFARE SCAM!!! He wants to incite anger in the poor/middle class by blaming all their problems on the wealthy, or corporations......all in accordance with Saul Alinskys (Socialist), Rules for Radicals!!!
Posted on: Sun, 26 Jan 2014 03:41:34 +0000
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