What to look for within a company’s reported numbers

What to look for within a company’s reported numbers

It’s no picnic trying to second-guess exactly what the numbers presented by an ASX-listed company are telling you as a shareholder or potential investor, so you need to understand commonly deployed tricks that can make reported figures look more attractive than they really are.

The first thing you need to understand is that Australian accounting standards allow ‘wriggle room’ for companies to tinker sufficiently with figures on balance sheet that it’s often difficult to distinguish between investment grade stocks and those with excessive debt or liquidity issues.

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