andreweverett360 Book Review, Finance

Quality of Earnings


Quality of Earnings: The Investor’s Guide to How Much Money a Company is Really Making
by Thornton L. O’Glove

Thornton “Ted” O’Glove published the Quality of Earnings Report from 1969 through the 1980s, identifying red flags in financial statements for institutional investors. He wrote this book in 1987 to share his due diligence methods with individual investors.

“Often the stock can go north while the quality of earnings goes south, and vice versa.”

For example, the author provides examples of how reported net earnings growth can mask a decline in operating income — or even an operating loss.

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andreweverett360 Book Review, Finance

HBR Guide to Buying a Small Business


HBR Guide to Buying a Small Business: Think big, buy small, own your own company
by Richard S. Ruback and Royce Yudkoff

This book provides a methodology to find, evaluate, finance, and acquire a small business. The autonomy of entrepreneurship is compelling to many, but the failure rate of start-ups is high—more than two-thirds of them never deliver a positive return to investors. In contrast, this approach seeks to buy and manage an existing “enduringly profitable” business. The authors teach a course in entrepreneurship through acquisition at Harvard Business School.

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