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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (523)	10/27/1998 7:20:00 AM
From: cfimx	Respond to of 4690

james, run of the mill software companies are notorious for reporting escalating earnings, but when you look at the cash flow statement ( which I agree should be done first) the recievables have gone crazy and there is usually a line for software development costs that keeps growing. The end result is a company that reports the earnings growth that the street likes to see, but is slowly going bankrupt, a la sunbeam. You're right. Each would be discarded with only a mere glance at the cf statement.