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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The Key Point 