Archive for August, 2010

Financial metrics - look behind the numbers

August 16th, 2010 by Jim Cotterman

Howard Schilit’s article, Financial Metric Shenanigans, in the August issue of the AAII newsletter (membership required to view article) provides solid advice on metrics that cover three key business reporting measures — revenue, earnings and cash flow.  The article reminds us how important it is to verify what management reports (including consistency in definitions of terms) and to be alert to what management does not report.  The article sent me looking for more and I found his book on the same topic.  The article and book are useful to anyone reviewing a business’s financial reports.