Financial Shenanigans, Fourth Edition: How to Detect Accounting Gimmicks & Fraud in Financial Reports, 4th Edition

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The Unraveling

Until now, Financial Shenanigans has mainly focused on describing a variety of accounting tricks and how investors could have spotted them. Companies using such tricks to hide business problems sometimes collapse in a spectacular fashion, creating large losses for investors. We refer to this meltdown as the unraveling.

This chapter highlights three companies that employed a variety of shenanigans to hide business problems from investors but eventually imploded as the accounting scandals were revealed. The first two companies profiled have had a long history of success (Hertz Global Holdings and Toshiba Corporation). The third company profiled is a relative newcomer, but had a spectacular rise and fall in less than a decade ...