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quality-of-earnings

Measures the gap between reported profit and cash, decomposes where it went, tracks it over eight quarters, and rebuilds owner earnings beside reported EPS.

ValuationStage 4 Thirty minutes with the script.

This one is in the paid set. Enter your code below and the download turns on.

Reach for it when

  • Cash flow looks nothing like profit and you want to know why
  • red-flags found something in working capital
  • Before believing an earnings multiple
Needs first
Three years of statements, and eight quarters for the trend.
Leaves behind
The accruals ratio, cash conversion, the gap decomposition, and owner earnings with a stated maintenance-capex method and a range.
Takes about
Thirty minutes with the script.
Will not
Treat the accruals ratio as proof of anything. It flags a statistical pattern in earnings persistence and says so every time.

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