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This is how companies inflate earnings! - Views on News from Equitymaster
 
 
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  • Aug 6, 2013

    This is how companies inflate earnings!

    Here is today's recommended reading list from Equitymaster...

    What is keeping dollar strong?
    We all know that a fate of a nation's currency is linked to economic conditions. But dollar seems to be an exception to this basic economic logic. Despite worsening fundamentals, ratings downgrade, and mounting debt, dollar seems to be on a tear. So what has kept it strong so far? More importantly, what could be the possible fate of the world's most despised currency? Read on to find out... (Wall Street Daily)

    The next crisis for China
    What is the biggest threat that China is facing currently? While credit crisis is the most talked about, the Chinese economy seems to be at serious risk due to an impending demographic crisis. The demographic trends are so alarming that China is reconsidering one child policy. But will this be enough to avert the crisis? Read on to find more... (Moneyweb Holdings Limited)

    Do you have this indispensable quality to be successful?
    In this interesting article, the author talks about some of the key traits that differentiate winners from losers. Read on to find more.... (Forbes)

    What does the board of directors do?
    We all know that every company has a board of directors that governs it. However, do we really know what they do? Who are the members that make up the board? What are their responsibilities? These are just some of the questions that are answered in this interesting article. (About.com)

    This is how companies inflate earnings!
    Financial shenanigans or accounting frauds are difficult to decipher. They are intended to mis-guide investors. Under pressure to manage earnings management of many companies have admitted to cooking their books. While these frauds come to the limelight over time most gullible investors fall prey to the earnings misrepresentation by such corrupt managements. Here is an article that highlights a few accounting shenanigans that companies typically resort to in order to inflate earnings. A better understanding of such fraudulent practices can help investors take better and informed decisions with respect to their investments. (Business Insider)

      Richa Agarwal (Research Analyst), Managing Editor, Hidden Treasure has over 7 years of experience as an equity research analyst. She routinely scours the small cap universe for fundamentally strong companies trading at attractive prices. Having degrees in both finance as well as engineering has served her well in analysing business models across the small cap space. Richa is also the specialist in our team for the Oil & Gas sector.

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