Companies usually record their assets on book values, and define profitability and capitalization on market value. A general rise in stock price of a company can increase overall market value of company. Whereas, assets are subjected to depreciate at regular interval which actually decrease market value of total assets. In such cases companies usually see mismatch between asset and claim side of balance sheets. How companies fill this game?

Answer rating: 100% (QA)

Balance sheet and income statement are written on original book value and are d... View the full answer