Chapter 14
Applying Wall Street’s Tricks and Treats to Engineer Financial Results
IN THIS CHAPTER
Heeding a word of warning: Financial engineering does not mean accounting fraud
Understanding what it means when a company uses “financial engineering”
Checking out commonly used financial engineering strategies
Discovering how companies manufacture profits and, yes, losses
Recognizing trends that may not be your friend
The title of this chapter makes a gesture to Halloween; we all know that this is the yearly event when you go house to house with your kids and hopefully receive free treats. To a certain extent, the same logic applies with Wall Street because recently it seems that they can hand out all types of free “treats” when companies report financial results. While on the surface, the financial treat may appear to be very appealing, the tricks should be closely watched and understood to ensure you’re not getting a rotten apple in your bag.
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