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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Mercer-Hursh who wrote (52191)	7/18/2002 2:57:52 PM
From: Stock Farmer	Respond to of 54805

If the end of nine innings can come somewhere in the middle of the life of a company before the last balance sheet, then yes you are correct. In fact, the sum of (Assets acquired - Depreciation) = Book Value of assets at all times. Which you point out is generally non-zero. However, if last balance sheet marks the final out of the ninth inning, then you have neglected one little nuance. This period includes a disposition of assets, necessary to wind up the company. The disposition of book value is a negative acquisition of assets. Subtracting an amount equal to Book Value of Assets from something equal to Book Value of Assets leaves us with zero. On any sale of assets there is a possibility that they are sold for a price different from book value. Accountants resolve this by calling the difference profit and recording it in GAAP earnings instead. The end end end result is that the complete sum of (Depreciation - Assets Acquired = 0). Unequivocally. John