Serious investors should mark down March 10 as the day to obtain a signed copy of a hot new investing book that shows how to see through the often fuzzy math of corporate accounting practices.
Accounting professors Charles Mulford and Eugene Comiskey will discuss their new book, Creative Cash Flow Reporting: Uncovering Sustainable Financial Performance, and sign copies at 5 PM in Room 200 of the College of Management.
The book is the follow-up to their 2002 bestseller The Financial Numbers Game: Detecting Creative Accounting Practices, which The Financial Times recently ranked among the very best personal-investing books ever. Creative Cash Flow Reporting is already earning equal praise, with MarketWatch columnist Herb Green deeming it a necessary part "of any serious investor's personal reference library."
Published by Wiley, the book teaches investors who've been burned by the recent wave of corporate accounting scandals how to effectively gauge a company's financial performance. In the wake of frequent fraud, many investors have come to rely on cash-flow statements instead of dubious earning reports as a measure of corporate fiscal health. But cash-flow reports may not be any more dependable, Mulford and Comiskey write.
Their book shows investors how to calculate sustainable cash flow, a better measure of financial performance than operating cash flow. Profitable operations are a must to produce sustainable cash flow, which is recurring cash, but companies often can generate positive operating cash flow without actually turning a profit, Mulford and Comiskey explain.
"I always assumed that operating cash flow was the last word when it comes to evaluating a company's results," writes Harry Domash, publisher of the Winning Investor newsletter and an investing columnist for the San Francisco Chronicle and MSN Money. "No more! Mulford and Comiskey's latest effort opened my eyes to what really counts: sustainable cash flow."
Mulford and Comiskey also have collaborated on the books Financial Warnings (1996) and Guide to Financial Reporting and Analysis (2000). Their book signing is sponsored by the Georgia Tech Business Network.