Tuesday, March 08, 2005

Accounting games: How Banks Pretty Up The Profit Picture

Commentary: How Banks Pretty Up The Profit Picture

Need another example of why cash flow matters more than accounting numbers? BusinessWeek and the Financial Accounting Blog provide us with examples of how banks can play with their loan loss reserves to "manage" their earnings.

1 comment:

Josh Kerbel said...

As someone who is actively involved in corporate finance, as in I make the credit decisions and I cut the cheques, I am constantly amazed at how many financial professionals forget that the only thing that really matters is CASH, not EBIT, EBITDA or some other bizzare acronym used to disguise cash flow from operations.