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dexazuxo's version from 2017-05-13 14:32


Question Answer
CASH FLOW: Warning signs for manipulationCFO persistently lower than net income
Payables rising faster than sales
Receivables dropping sharply and out of line with sales trends
CFO? and How to calculate?Cash flow from operations = Net income +/- non cash item
What does it mean to capitalise something?To get a piece of daily expenditure and capitalise it by calling it an asset. This is a way companies can manipulate statements
Line of defence for investors- Sell side analyst: Can identify manipulation but may be under pressure by the company
- Buy side analyst: Provides research advice to fund managers
- Media: Holds the power to public exposure and negative publicity.