Huhuh

To forecast or not to forecast? Bew are firms that head off to disregard one-year financial targets Feb 26th 2009 | from the print var. [pic]Illustration by Claudio Munoz DIVINING what the future holds is tricky at the best of times; at the worst, it is devilishly difficult. So why bother? Citing the topsy-turvyness of the worldwide downturn, a growing number of companies, including Unil eer, an Anglo-Dutch consumer-goods firm, Costco, a spectacular American retailer, and Union Pacific, one of Americas stupendous railroads, cave in decided not to give annual bread estimates for 2009. If incessantly there was a moment for firms to cumber their crystal balls ch yetnian wraps, this may appear to be it. tho m either companies are still issuing annual forecasts in spite of the doubtfulness roiling their markets. On February 24th, for instance, Home Depot, another(prenominal) American retailer, estimated that its revenues and earnings per share from continuing operations would resist by around 9% and 7% respectively in its 2009 financial year. anterior this month, Reckitt Benckiser, another European consumer-goods group that competes with Unilever, verbalize it was confident it could ontogeny its revenues by 4% this year. Issuing much(prenominal) targets is pointless and dangerous, critics claim.

They manage that, with the banking industry catatonic and consumers pulling their pocket edition strings ever tighter, the world is so topsy-turvy that any financial aspiration impart be out of sequence as soon as the ink dries on the public press release. Moreover, when companies then issue! a mea culpa and lower their forecasts, disappointed investors will hammer the expenditure of their shares. To avoid this punishment, managers will be tempted into short-termism, cut investment in research and development or sore machinery, for instance, even if that amends their firms longer-term prospects. Better, then, to stay mum rather than hazard a mauling. But such arguments do not hatch that companies should ditch forecasts altogether. just because peering...If you want to get a in effect(p) essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper