How you can be fooled by long-term contracts

There are lots of ways company directors can legitimately ‘cook the books’ and make it look as though their firm is making more profit than it really is. Here, Tim Bennett takes a look at one of them – long-term contract accounting – and explains what to look out for as an investor.

More from this series

How investors can be fooled by brands
How investors can be fooled by long-term assets
How investors can be fooled by provisions
How investors can be fooled by development costs

Video tutorial - why profit margins matter

Why profit margins are really useful

In this video, Ed Bowsher explains how to calculate a company’s profit margin, why it is the best way to evaluate profitability, and how you can use it when analysing a company.

Video tutorial: why hedge funds can be good news

Why hedge funds can be good news

Hedge funds perform a valuable service by weeding out overvalued shares. In this video, Ed Bowsher explains some of the things they look for when they’re hunting for shares to short.

Video tutorial - what is the current ratio?

What is the ‘current ratio’?

In his latest video, Ed Bowsher looks at the current ratio, which can help you see whether a company has sufficient resources to pay its bills in the near future.

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