Originally posted by nikhil090
Great effort. Great learning.. |
I totally agree, this is an excellent thread.
On the question of "Why is past performance important?" In addition to the points mentioned, I would say that it is one of the most tangible tools to evaluate the management quality & consistency, that's why past is important. Looking at past financials only for their embedded ratios & percentages is a very limited utility of numbers. Past financials speak about management actions (their aggression/conservatism), information-sharing (quality of disclosures), their responses to changes in external environment, skills in managing operations, marketing & finances. Other indicators of assessing management are qualitative, and at times unreliable.
Edited by master - 19/Aug/2010 at 11:50pm