What do you mean by window dressing of balance sheet

Question

Accepted Answer

Window dressing of balance sheet refers to manipulating financial statements to make a company appear more financially stable than it actually is.

It involves using accounting tricks to improve the appearance of financial ratios and metrics.
Examples include inflating revenue, deferring expenses, and understating liabilities.
Window dressing is often used to impress investors or lenders, but it can be misleading and unethical.
It can also be a red flag for potential financial problems or fraud.
Regulators and auditors are responsible for detecting and preventing window dressing.

Accepted Answer

Window dressing of balance sheet refers to manipulating financial statements to make a company appear more financially stable than it actually is.

It involves using accounting tricks to improve the appearance of financial ratios and metrics.

Examples include inflating revenue, deferring expenses, and understating liabilities.

Window dressing is often used to impress investors or lenders, but it can be misleading and unethical.

It can also be a red flag for potential financial problems or fraud.

Regulators and auditors are responsible for detecting and preventing window dressing.

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