As an investor, it's essential to sort out the good companies from the bad, and the clues you'll need are in the financials. Join author Tom Jacobs as he raises the red flags of financial chicanery. Avoid and even profit from companies committing scandalous accounting.
Check out the rest of the videos in this series:
What's Behind the Numbers: Learn Red Flags, Avoid Blowups
Red Flag 1: Too Much Inventory, Writedown Ahead?
Red Flag 3: Serial Acquisitions: Apples to Oranges
Slay Your Fear of Shorting: Use Put Options to Know Your Risk
Red Flag 4: Collecting the Revenue: Too Many Days' Sales Outstanding?
All Red Flags Waving!
With so much of the financial industry getting bad press these days, it may be a "be greedy when others are fearful" moment. Not surprisingly, some of Warren Buffett's biggest investments are in the space. In the Motley Fool's free report, "The Stocks Only the Smartest Investors Are Buying," you can learn about a small, under-the-radar bank that's too tiny for Buffett's billions. Too bad, because it has better operating metrics than his favorites. Just click here to keep reading.
This article was originally published as Red Flag 2: Are Stock Options Making the Cash Flow Fake?on Fool.com
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