and could make better informed decisions about whether to invest additional funds in Strassli or put their money elsewhere.
Under the current system of disclosure, Strassli is understating its financial performance, with the result that investors do not realize how strong the company actually is. By improving disclosure requirements, the investing community would be better informed about Strassli's true position in the market, and the price of the stock would likely increase. This would present a strong benefit to Strassli's investors.
There is some reluctance to improve or modify Strassli's disclosure practices because its competitors would not be immediately required to do so. Just as Strassli would be presenting an improved picture of the company to investors, so it would also be presenting an improved picture of the company to its competition; one cannot filter out who receives the information. To some degree, this puts Strassli at a competitive disadvantage. While Strassli would be accurately portraying its financial performance, and competitors would no longer have to estimate the company's revenues, the competition is under no such obligation to reveal as much information about itself. However, while the disclosure of information might provide competitors a slight advantage in estimating Strassli's ability to compete, the company is also likely to realize a competitive advantage of its own through better disclosure practices. Because the company would be presenting an accurate and informed picture of its performance, creditors and suppliers would be more likely to extend credit to the company since they would not have to estimate its true financial strength. In this way, the competitive advantages and disadvantages of improved financial disclosure may well cancel each other out.
Others would are interested in the company's financial disclosure practices include those considering Strassli for a takeover target. T...