What You See Is Not What You Get, Always! A Distorted but True View of Company Financials when Distressed

Cakir, Murat (2017): What You See Is Not What You Get, Always! A Distorted but True View of Company Financials when Distressed.

Abstract

Corporate failures and dismantling have become more and more widespread after the late 2007-2008 global crisis and individual as well as bulk numbers of cases are almost many as since the Great Depression. In another study , I had discussed the importance of the roles of non-financial firms in concert with the households in this crisis. The liquidation value of “the distressed firm”, as the case may be, depending on what type, as well as the determination of financial and operational distresses, becomes a crucial part of the supervisory process, if the firm does not recover from any of those. Therefore, going back to good old college days, to refresh our memories of what the value of a firm if distressed was, deemed necessary and I have devised this exercise to show what I understand of the liquidation value of a firm as such.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate failure, financial distress, operational distress, liquidation value
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M41 - Accounting; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M42 - Auditing

References

Cakir, Murat (2016), 'A Conceptual Design of “What and How Should a Proper Macro-Prudential Policy Framework Be?” A Globalistic Approach to Systemic Risk and Procuring the Data Needed', MPRA Paper 72832, University Library of Munich, Germany.

Graham, Benjamin and Spencer B. Meredith (1937), The Interpretation of Financial Statements, Harper & Brothers New York