Partnerships — Financial Statement of the Company

Subject post is to share an interesting observation with regards to the financial statement of the corporation(s), Public as well as Private. Most of the companies (un)listed manage their enterprise via long/short term partnerships. These partnerships could be in the form of Tie-up’s (Sales & Marketing, Technology, Production & etc.), Franchisee arrangement, Inter-corporate/Familial, Tactical (Anti-hostile Takeover, Last Means Finance) and Issue based obligations.

Currently, all financial statements tend to carry some of this information in the ‘Notes’ to the statement, and which is expressed in absolute numbers. However, to be honest, it only tends to offer an assurance of transparency, without offering an in-depth and tactical view of the books to the investors in a particular company. Therefore, for the sake of investor awareness it is imperative for market regulator to consider steps to have these hidden partnerships within a financial statement to be quantified along with absolute numbers.

‘Quantification’ (e.g. an inherent partnership percentage of sales/cash/capital ) will offer a bird’s eye view of all partnerships within or outside an organization. Further it could be expressed & quantified on the basis of geographical, financial, familial & etc., type of partnership(s). Historically, the majority of fraudulent, bankruptcy or cash mismatch kind of events, in all probability have occurred due to failures of these inherent partnerships. Hence, a simple step towards investor awareness with a vigilant slant could offer enhanced transparency for investors.

Regards, jac4pac.