What’s Behind the Numbers? A Guide to Exposing Financial Chicanery

on Youtube about book.

20:26 4 top earnings quality predictors:
1. aggressive revenue recognition. “stuffing the channels”: borrows from future, works until it doesn’t
2. aggressive inventory management
3. cash flow warnings
4. serial acquisitions

25:14 Day sales outstanding

  • longer to get paid
  • poor customer credit
  • extended payment terms

26:36 Cash flow warnings: looks like cash, but can’t last:

  • accounts receivable down
  • inventory down
  • accounts payable up
  • lots of stock-based compensation

28:04 Serial acquisitions

  • moving target, or 3-card monte. e.g. Hewliett-Packard, Cisco Systems
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About mcturra2000

Computer programmer living in Scotland.
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One Response to What’s Behind the Numbers? A Guide to Exposing Financial Chicanery

  1. Pingback: 6-month checkup | mcturra2000

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