Warning Signs for Accounting

A declining gross margin is something that make my ears perk up. Another one is rapidly expanding sales and marketing expenses. I've dramatically preferred to invest in businesses that have a stable gross margin over long periods of time.

Transcript

chevron_right

Play full episode

chevron_right

Transcript

Episode notes

IN THIS EPISODE, YOU’LL LEARN:

02:52 - What is a stock and why do stocks have value?
04:40 - The main factors that increase a company’s value over time.
05:48 - What causes stock prices to move up and down and why this sometimes has nothing to do with company value.
07:51 - How share repurchases and dividends impact a company’s stock price and company value.
11:26 - Why the P/E can look inflated based on the market cycle, accrual accounting choices, a company's equity investments, etc.
14:04 - What factors influence a company’s reported earnings that you may need to adjust for when valuing a company.
21:06 - An overview of GAAP and non-GAAP accounting, what are the differences between the two, and which should investors focus on for valuation analysis.
24:44 - What are the main ways that earnings can be manipulated based on accounting assumptions used?
46:27 - What are some accounting warning signs to look out for that might suggest companies might be cooking their books?
49:54 - What discrepancies to look for in a company’s income statement vs cash flow statements.
And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Check out Brian’s book, Why Does the Stock Market Go Up?.
Related Episode: You CAN Beat The Market w/ Brian Feroldi - MI082.

NEW TO THE SHOW?

Check out our Millennial Investing Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try Kyle’s favorite tool for picking stock winners and managing our portfolios: TIP Finance.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

⁠CFI Education⁠
⁠Airbnb⁠

Connect with Brian: YouTube | Twitter | Blog

Connect with Rebecca: Twitter | Instagram

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Learn more about your ad choices. Visit megaphone.fm/adchoices

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!

Get the app

Home Top podcasts Popular guests