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Clarkson Company Disadvantages

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1. What are the advantages and disadvantages of going public?
Advantages;
It helps you grow your company more rapidly by providing you with extra financial resources.
Helps you attract and keep top-notch people with reasonable salaries (through stock options).
Grow your company faster by attracting a knowledgeable, experienced board of directors.
Raise capital faster and with less cost.
Going public increases, the liquidity for your business and that of your investors.
It frees up capital and creates marketable stock that can be used to acquire other companies and form strategic ventures with other companies.
Going public increases your growth rate by increasing your ability to compete for large contracts.
Issuing an IPO can quickly and substantially …show more content…

Pros;
1. It is easy to compute.
2. It is conventionally and widely used.
3. It takes forecasts into account.
4. Earnings is a measure of what is generated for shareholders.

Cons / problems with using the P/E are:

1. It does not take debt/financial structure into account.
2. Gearing up/share buy-backs increase earnings - but it may be a one-off effect and achieved at the cost of increased risk.
3. Comparisons are undermined by different accounting policies across companies and countries (depreciation, amortization, tax, etc).
4. Earnings are particularly prone to manipulation.
5. Targeting earnings may lead to decisions that disadvantage the business.
6. It cannot be used to value loss-making early-stage growth or cyclical businesses.
7. It does not take cash generation into account.
8. It does not take investment returns into account.
9. Growth of earnings may take place at the expense of ROIC.
10. Growth of earnings may take place at the expense of net asset value
11. It presents difficulties in assessing quality of

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