When an impairment loss occurs, past income statements are not restated. And then, an impairment loss will be involved in the current income statement which is in the pre-tax income from continuing operations. Net profit will also be lower. Additionally, long-term assets are reduced by devaluation. Furthermore, shareholders' equity decreases. 3.3 The effect of devaluation on the financial performance of a company For a company, when there is devaluation, there will be more risk, and the company will have more chances of not being able to resist that risk. Cash flow based ratios will also remain unaffected. It will be the same higher future net income as the lower asset value and a lower depreciation expense. Future ROE and ROA will increase. Furthermore, the valued fixed assets and write-down policy of past relationships are distorted by impairment write-downs.3.4 The performance of NCM Ltd with debt of 15%