18
The Power of Ratios
The eyes may or may not be a window into the soul, as Immanuel Kant suggested, but ratios are definitely a window into a company’s financial statements. They offer a quick shortcut to understanding what the financials are saying, no matter whether the company is a start-up, a small but growing company, a struggling midsize business, or a large, publicly held company. A Paine Webber analyst named Andrew Shore knew this and used his skill at analyzing ratios to tell the public about a fraudulently managed public company—Sunbeam, when it was run by the notorious CEO “Chainsaw Al” Dunlap. We’ve mentioned Sunbeam before in this book, but now we want to relate a few more of the sorry details.
Dunlap had arrived at Sunbeam in ...
Get Financial Intelligence for Entrepreneurs: What You Really Need to Know About the Numbers now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
