Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote user="CMStPnP"] [quote user="Sam1"]Had you only analyzed the December through March financial statements for the company that I worked for, you would have been struck by the red ink (losses). But over a year we made money. What was lost during the winter was more than made up in the late spring, summer, and early fall.   [/quote] Most manufacturing companies handle that via a seasonal adjustment factor vs looking at the entire year.   The adjustment factor would smooth out the peaks and valleys if indeed there were any that regularly occured.     So for example since car sales are seasonal in this country most car companies use a seasonal adjustment when looking at car sales for a period within a year.   In Texas natural gas is used primarily in winter for heating and electric is used primarily in summer for cooling.    It's possible electric utilities such as TXU, don't do that because they are in in business no matter what they do.....all they need to do is raise rates if they run into any financial trouble or missed forecast.     I would not compare utilities Accounting to more precise models out there and the last thing Amtrak needs is to emulate Utilities accounting.    I personally would prefer Amtrak be more vs less precise in it's Accounting method.    I worked as a contractor  for a large energy company in Texas (Enron) as a consultant and my most vivid memories of that experience: 1. Anderson Consulting advising their business end and Andersen Accounting auditing their books.   Inherent conflict of interest that led to Auditors overlooking criminal activity. 2. Massive charges in the footnotes of the financial statements on a regular basis. 3.  24-27 year old "Executives" imported and hired direct via Andersen Consulting with no real business operational experience  attempting to make multi-million dollar decisions. What a E Ticket train ride that was.     Would hate to see Amtrak operate like that. <div style="clear:both;"></div> [/quote] To adjust interim period results for seasonal factors, you have to know what they are. One way to get them is to use regression analysis to develop a trend line so as to be able to forecast the seasonal impact on the interim period results.  One way or the other to get a complete picture for any entity, you have to know the the seasonal impacts on the financials.   Most businesses cycle through at least a year.  That is why, if they are a public company, they are required to issue annual financial statements.  As a matter of fact, most private entities, partnerships, etc. generate annual financial results.   Your misunderstanding of the electric utility business in Texas is palpable. Beginning in 1988 Texas' investor owned electric utilities began the deregulation processes. The first step occurred in 1992 with the introduction of competition in the wholesale power market. By 2002 the entire generation and retail market had been deregulated.   Today the electric utility business in North Texas, as an example, is highly competitive. In the Metroplex residents can choose from more than 200 electric utility plans offered by more than 35 retailers. Moreover, power generators, if they want to sell their power, must bid into the power pool every 15 minutes. Outside of stock, bond, and foreign exchange traders, I cannot think of anyone that operates in a more competitive market. The demand curve for electricity in North Texas has two modes.  The largest, of course, is the summer load, which is driven largely by the demand for air conditioning.  The second mode, which occurs in December and January, reflects the increase use of electric heat in the winter.   What do you know about utility accounting?  It conforms to GAAP.  In addition, the regulators impose greater requirements on utilities because of the rate making processes for the portion of the business that is still heavily regulated, i.e. the poles and wires segment of the business. Amtrak is a stock company.  Its accounting practices conform to GAAP.  Like investor utilities, its financial statements are audited by outside auditors.  Its requirements are not significantly different than any other company that complies with GAAP. How about giving us several specific examples of of how Amtrak's accounting practices differ from those of the electric utility business. What makes you believe that Amtrak's accounting practices are more precise or less precise than those in the utility business. What is the basis for your views on accounting and finance?  Are you an accountant?  What certifications do you have?  What is your educational?  What type of consulting did you do?  You can tell us the type of consulting you did without disclosing who you worked for, although you have already given us the name of Enron.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag