Equity capital on the balance sheet is reported using historical cost accounting and at times differs considerably

Question:

Equity capital on the is reported using historical cost accounting and at times differs considerably from market value. How should our analysis allow for this, if at all, in analyzing capital structure?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...