The amount and type of information that companies disclose in their financial statements is of considerable interest to current investors, employees, potential investors, creditors, suppliers, the government and a host of other interested parties, including creditors. Companies must strike a balance between providing enough information to be in compliance with the law and to provide relevant information to potential investors, but at the same time, companies do not want to expose unnecessary information which could put them at a competitive disadvantage.
One of the benefits that Strassli Holding would receive by improving the quality of its financial disclosure is that it would be more accurately presenting the status of the company at any particular time. This means that creditors would have a better understanding of the company's position, and might be willing to extend additional credit, and potential investors, informed as to the company's actual performance, may invest additional money or drive up the price of the stock in light of favorable information.
Because Strassli is a holding company, consolidating information for the various subsidiaries would improve statement quality. This is because the statements would now reflect the performance of all of the various subsidiaries, which directly affect the performance of the company as a whole. Failure to provide this information misrepresents the parent company's performance and the ability of the parent company to meet its obligations.
One of the groups that would benefit the most from improved disclosure requirements is Strassli's shareholders. As it is, shareholders must manually calculate the performance of the company and try to estimate the company's earnings based on what information the investors can put together from various sources. If the company improves its disclosure requirements, investors would have a better understanding of the company's performance, ...