/biz/ - Business & Finance

Because he still can't make a profit while playing (((tricks))) like this with his books.

TO CLARIFY - I AM BY NO MEANS SAYING THEY'RE UP TO ANYTHING, I JUST WANT SOME OPINIONS ON WHAT I'VE FOUND SO FAR.

Recently, I've been looking into earnings manipulation and how to detect it. Specifically, I've been reading up on Enron. Turns out, Enron was picked up years before it blew up by a couple MBA students doing a project. Among other redflags, was a metric call the Beneish model, which signals earnings manipulation. According to what I've been reading, Enron's score on this model signaled manipulation back in 1998.

>get curious
>start applying metric to top companies to see what I can dig up
>test all the big name tech companies (figure they'd be the ones most likely to be manipulators)
>Apple, Alphabet, Amazon, and Facebook check out
>Test out Tesla
>score is -0.42 (any score >-2.22 is said to be a likely manipulator) - link is at the end
>see their median score for past 10 years is -1.13
>Go into their 10K (link also provided at the end) and start reading through footnotes
>First thing I notice is pic related on page 61 that they recognize free services such as car charging and free internet access) as revenue
>price/sales is a popular tool for people analyzing pre-cashflow companies
>already seeing potential for problems
>go to expenses, notice they offset it in cost of goods sold
>offsetting expense accounts for about 8% of revenue so not too bad
>realize they seem to just be accounting for these expenses in one place though
>appears to be a wash even though it should be a net expense (I think)
>also a lot of shit going on with VIEs, sale-leasebacks and shit but I'm too caught up on this to get into it

What do you guys think? Am I missing something or have I just uncovered some shit the analysts are missing?

Beneish Model: https://www.gurufocus.com/term/mscore/NFLX/Beneish-M-Score/Netflix-Inc

Tesla 2016 10K: http://files.shareholder.com/downloads/ABEA-4CW8X0/5869828787x0xS1564590-17-3118/1318605/filing.pdf