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Microcap & Penny Stocks : TSIS: WHAT IS GOING ON?
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To: gregor who wrote (5760)4/9/1999 12:19:00 PM
From: jmt  Read Replies (1) of 6931
 
Why does the SEC require two years of audited results for fully reporting status; what about an IPO, are not many of them began as fully reporting?

Two years of audited financials are required for a couple of reasons. First, financial information is less valuable without comparability. If companies just filed one year, one showed a loss, and the other a profit, which would you buy? Now lets add the prior year for both companies. The one with a loss shows revenues have doubled as compared to the prior year, and the loss was significantly smaller. The profitable company shows declining year over year revenues, increasing expenses and a much smaller profit than the prior year. Now which company would you buy?

Both years need to be audited to ensure the accounting is consistant between the two comparable periods.

Concerning IPO's, what are the options?

jmt
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