01 September 2007

Closing the Book on the Second Quarter

In the last week, we worked on a handful of analyses, including attempts to calculate gauge scores for ADP and Home Depot. However, in each case corporate M&A activity kept us from ascertaining with confidence the consistent historic financial record required by our methodology.

Companies provide restated results after significant deals, but we often find ourselves with a heap of new data for some quarters and old data for others. It's truly baffling to have a restated income statement, old balance sheet, and ambiguous cash flow data for a particular quarter.

Sometimes this sorts itself out after a few quarters. We would rather defer an analysis and wait patiently for a financial baseline to emerge than make apples-to-oranges comparisons.

We would like to see more companies keep a 3-to-5 year consistent set of financial data by quarters on their web sites. We commend those companies that make a good faith effort to keep investors supplied with relevant data, and we're hopeful the others will do more.

With that, and given that it is now September, we're going close the book on the second quarter and start looking ahead to the results that will become available in October and November.

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