Spotting quality of earnings red flags

Cash flow comfortably ahead of profit, receivable days flat, revenue arriving evenly through the quarter. Three clean checks, and the profit is still not a sound base to forecast from. This course teaches the four checks in the order that catches it.

₹499/- ₹0

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1,000 seats total 207 left

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6 things you will be able to do

11 units, 60 minutes. Every one of them ends with something you can do.

01 Measure the accrual gapThe distance between reported profit and the cash that arrived, computed rather than described.
02 Run three working capital ratiosReceivables, inventory and payables, read as behaviour rather than as balances.
03 Check the quarter endWhether revenue arrived evenly or concentrated into the last three days of the period.
04 Follow a cost into investingCapitalisation is permitted and disclosed, and it is invisible to every check above. Learn where to look.
05 Test the one-off that repeatsThree years of items each described as exceptional, laid side by side.
06 Read related party flowsWhat a flag is and is not, and the three sentence verdict that comes out of the full screen.

What changes after this course

You stop reading operating cash flow as the verdict and start running four checks in a fixed order, ending in a three sentence answer.

Four checks run in order on three years of one company’s statements

A three sentence verdict on whether the profit is a sound base to forecast from

The single line to ask the company about, named

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