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Questions On Financial Matters : A Container Company Ranking 6th Among The World Container Carriers

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To speak about financial matters, I decided to use the example of Hapag Lloyd which is famous container company ranking 6th among the world container carriers. We can find financial data from a great variety of sources either internal or external for public addressing.

Having access to internal sources requires to be part of company since it involves some manager’s report in their dedicated fields as well some client’s records or operations expenses. Internal figures are recorded by the accounting system which compiles all the department’s transactions and will combine all the results. All this mass of data must be categorized in order to create a clear summary of the global financial situation. Such an accountancy has to be performed
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- Any financial statement is normally approved by an external auditor. That would stand as a guarantee that all figures and statements reflect the true situation of the company.
- Any financial result is subject to taxation regulated by the fiscal administration of the country. That’s a form of additional security since fiscal declaration is then cross-checked by this authority.
We can also get data from the stock exchange if the company is listed. For example Hapag Lloyd is listed in Frankfurt so values of the value of their shares and their fluctuation can be used to determine their financial performance. Since the stock exchange is regulated by strict authorities and its operations are clear. Consequently, this is a very reliable data to take into account.

A.C. 1.4 - Review and question financial data

When reading financial data, some attention must be paid to assess their veracity. Over the past, some accounting techniques have been used to mislead investors on the true financial situation of the company. We’ll details some of them.

- The most common is creative accounting which consists in diverging from the GAAP to misrepresent financial figures in order to modify the global financial results at the end. It’s usually include to deliberately inflate the income or to manipulate asset value and liabilities. For example, it would lead to present figures to creditors within the debt covenants in order to preserve current assets from
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