The informational role of inventory writeoffs:pic.twitter.com/HBx7WCvtQI
I don't understand this graph sorry - can you explain it? Inventory is written off for tax and accounting reasons all the time, so I wouldn't read much into it.
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Inventory writeoffs "signal" the quality of the retailer. A lower P/E is used to value the company, directly or indirectly.
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So basically if you say an inventory carrying company writing off inventory you ascribe them a higher earnings multiple because rather than faking earnings, their taking tax and accounting efficient maneuvers?
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