This paper explains that, as with most firms, Briggs and Stratton has instituted accounting
policies, which enhance its financial standing; these accounting policies
affect virtually every item on the company's financial statements, including revenues, expenses, and
inventory. The author points out that Briggs and Stratton does a good job of revealing its accounting policies and exceeds GAAP standards for disclosure; however, it appears that Briggs and Stratton may be
underestimating certain expenses, including
warranty and
depreciation expenses and costs of goods sold, which appear to be temporarily depressed due to LIFO liquidation and adjustments in the use of inventory cash flow models. This paper relates that one of the most important keys to success for a company is being able to make a
profit; therefore, many of Briggs and Stratton's accounting policies, such as inventory policies, including cash flow models that affect the cost of goods sold and depreciation expenses, affect its reported profit.