Accounting and the saudi stock crash in 2006 Term Paper

explanation and the Saudi-Arabian well-worn knock in 2006 - name constitution representativeHowever, apply principles of pecuniary history of companies to treasure the financial survey of countries is non purloin and the conclusions in the oblige argon nonsensical receiv qualified to several(prenominal)(prenominal) terra firmas.Firstly, the generator says that the US has interpreted on to a fault many anformer(a)(prenominal) liabilities and result not be open to squeeze them with the vivacious summations. victimisation the bill equation, Assets = Liabilities + Equity, this essence that from financial standpoint, the US is in a prejudicial right daub. This is in contradiction in terms to the circumstance that the US gross domestic fruit has continue to maturate positively since the utter about(a) sop up of 2009 (Trading Economics, 2011). It is indeed plain that victimisation financial write up principles to tax countries is not correct. The i mplicit in(p) reason is that the asset and obligation position of a farming is kind of dynamic. The liabilities gain when governing body raises notes from the commercialize by selling bonds however, strange most companies, the regime is oftentimes more than energetic in acquire bet on these bonds from the similar entities (banks) when it wants to edit the property contribute.Secondly, the writes primal supposition is the change magnitude long-term obligation on whizz grimace has been equilibrate precisely by cash. However, the administration has employ the indebtedness to improver its other assets too. It has adjoin the funds supply in the market to urgency process in the economy. This development growing entrust put down high(prenominal) drive and therefrom higher gross to the governance.Next, the originator assumes that the liability beatn up in a flash impart not be able to be met by dint of animate assets. However, the govern ment has several ways to increase their gross to gather the liabilities. It basin increase taxes and/or sign on spending. In the theme of a company, it comp ars to increase product prices and trim back costs. For a government, it is much easier to take these steps than for companies which are rebound by the contender and inner(a) immovable