August 2010

Background check

How short-selling sleuths spot accounting gimmicks on financial reports.

From Marketwatch.com.

With the economy mired in a deep slump and sales slowing, many companies found it necessary last year to reduce inventory.

Not Monsanto Co. Instead, the agricultural seed giant was building inventory. That raised questions among analysts at the Center for Financial Research and Analysis, who dig through corporate financial statements with the detail of a forensic expert.

"Most companies had been reducing inventories (in 2009), except Monsanto," said Jeremy Perler, co-director of research at CFRA. "Their inventories were building rapidly. That's a pretty powerful flag for an investor."

As the 2010 second-quarter earnings season wraps up, CFRA and other accounting sleuths are once again scouring the latest reports for disconnects between what company executives are telling investors and what the numbers are saying.

Read full article.

Leave a comment


Contact

Blackman Kallick
10 South Riverside Plaza
9th Floor
Chicago, IL 60606-3770

p 312-207-1040
f 312-207-1066
info@BlackmanKallick.com

Get Directions

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.