UK says excellent U.S. trade deal to be done, whoever wins presidency

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When is an accounting charge wrong? Usually when it is too low. General Motors Co. ( GM ) has set aside $1.2 billion as a charge to earnings for the current quarter due to the recall of 29 million cars and light trucks. The number is a management guess, blessed by accountants, whose guesses may not be any better. The eventual charges, based on the scope of the car companys problems, could be much higher. The GM charge makes several assumptions that may not be true. The first is the cost to actually repair broken cars, many of which have faulty ignitions. Another is the amount that GM will need to pay out to those who were injured or to their families. This will be the work of Kenneth Feinberg, who has performed related work for other large companies, the most visible of which was BP PLC ( BP ) after the Deepwater Horizon disaster. However, Feinbergs program covers only 2.6 million cars. GMs responsibility for the dead and injured may extend to other cars. And some of those people covered by Feinbergs plan may reject the offers and take their chances in the legal system, where there is some chance GM will lose. ALSO READ: The Best (and Worst) States to Be Unemployed Additionally, GM faces charges from some state and municipal authorities. The Orange County District attorney has filed an action against the Americas top car company for endangering motorists and the public by intentionally concealing serious safety defects in GM vehicles to avoid the cost of a recall or replacing defective parts. Several state attorneys general have begun to explore similar legal actions. Investors may sue GM as well for the loss of their investment, as GMs stock has tumbled. The eventual size of GMs legal risks, and the costs to repair as many as 29 million vehicles, is incalculable at this point. Whatever the costs, they can be measured against GMs net income, which was $5.3 billion in 2013 and $6.1 billion the year before. The charges GM has announced for now approach a quarter of those numbers. ALSO READ: Four Solid Dividends Yielding 9.5% or More Based on the huge hurdles GM faces, the odds are small that its earnings charge estimates are too high. More than a quarter of GMs profits are at risk because its potential liabilities keep growing. However, over the course of this year, at least, much more of the companys bottom line will be eroded. Related Articles States With the Most Gun Violence Nine Analyst Stock Picks Trading Under $10 With Huge Implied Upside Ten States With the Fastest Growing Economies View comments
# Transforming Raw Data: Mastering Feature Engineering in Python
Explore the significance of feature engineering in machine learning and discover practical techniques using Python.