Hi I need to answer the following. One Gas and Kinder Morgan are the companies we are evaluating for the years 2019, 2020, and 2021.

Evaluating accounting quality is more of an art than a science. The point is to form an overall opinion about the reliability of the numbers in the financial statements.

Does the company report nonGAAP earnings? What items do they exclude or include? Do the two companies report similar onetime items? Do the items seem reasonable, or do we detect some selfserving disclosures?

Consider the list in the Research Insight Box in the module, and use it to assess the quality of the two companies reported numbers.

Use an online investment website to find key ratios for close competitors. Compare to our companies.

Find the consensus analysts EPS forecast for the recent yearend. How did our companies fare? Were there any onetime items or unusual changes in any expenses that might have caused the company to just meet or beat the forecast? This could indicate earnings management.