Beware of Creative Accounting & Management of Earnings Estimation (29Aug2023)
In my latest preview of the week article, I have covered the company NIO whose earnings will be released this week. Can a business beat the earnings and be doing worse? This can be done via earnings estimate management and some “creative” accounting. The following is an extract from my recent article about NIO Performance of NIO Personally, I have already sold out my positions in NIO years back. Despite rising annual revenue, there has been no operating profit as the company has suffered losses since 2016. Losses in 2022 have surged to over $2.243B from the region of $706 in 2020 and 2021. As such, I prefer to monitor the business and hope to see them achieving profits soon. NIO has fallen by over 45% from a year ago. The last price of $10.83 (as of 25 Aug 2023) is above the 52-week low of 7 but remains a distance from the 52-week high of 22.74. For the coming earnings, Investing has a forecast of -2.96 and 9.16B for its EPS and revenue respectively. We should note that Inve...