So? Why is it impossible for businesses to do long-term accounting?
reply> Why is it impossible for businesses to do long-term accounting?
reply3% is pretty close to 0% which is very close to -1%. Think of it as a 3% margin for error.
They have been doing long term accounting, and that's why they're resetting their business
replyMany reasons:
reply- Investors bail - You run out of cash
Not exactly - stocks are already sold, you don't run out of cash from the stock price going down. You only run out of cash if you want to sell more stock to raise more cash (this happens, but it is somewhat rare).
replyHowever the owners are still going to be mad because their cash is down and they will demand changes to fix that.
I wouldn’t call issuance of new stock rare, it’s a major funding mechanism.
replyNot to mention a company with thin margins is going to have a hell of a time raising money through debt.
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