Earnings quality is how cash-backed and repeatable a company’s reported profit is. You use it to decide if the “E” in P/E is usable. Low earnings quality can inflate or depress earnings without breaking any rules. That makes the “E” a valuation input that can be wrong in either direction. Tie earnings back to cash […]
A balance sheet is a photograph. An income statement is a video. Each one persuades on its own, so you need both. The income statement can show earnings growth while the balance sheet shows the capital that had to expand to produce it. Read them together and you can answer the one question that holds up in a client meeting and a compliance review: did the business earn an acceptable return on the capital it employed?
Forensic accounting is the practice of examining financial records to find out what actually happened in a business, as opposed to what the accounting was permitted to report. It grew up in courtrooms: fraud investigations, divorce and partnership disputes, insurance claims, bankruptcy work. But the same techniques are the sharpest tools an investor has for one everyday question: is this company really earning what it says it is?
Undervalued stocks are stocks that are priced for weaker performance than the business has delivered. There’s a simple way to find them. Clean up the numbers, then compare them against the stock price.
September 22, 2026
