📜 Introduction: Welcome, sleuth of spreadsheets and whisperer of ratios. In this dossier, we unlock five curious cases where numbers lie, margins dance, and depreciation ages ever so gracefully — on paper.
🔎 Blurb: Holmes once said, “It is a capital mistake to theorize before one has data.” Prepare yourself: the ledgers are deep, the misstatements subtle, and the CFOs suspiciously cheerful.
(Click on the option to reveal the answer)
✒️ Game 1: The Curious Case of Vanishing Value
A CFO claims depreciation is irrelevant. You smell a rat. What do you do?
▸ Investigate CapEx & Asset Turnover
🧠 Good catch! CapEx exceeds depreciation 3:1. Red flag confirmed.
▸ Trust the Reported EBITDA
😬 EBITDA ignores depreciation. You missed the clue, Watson.
▸ Examine Salvage Value Assumptions
🔎 Salvage value is set too high — profits are inflated.
✒️ Game 2: The Phantom Revenue Riddle
A tech startup reports record revenue — but no cash. Suspicious?
▸ Review Accounts Receivable
🧾 AR has tripled. They’re booking revenue without collection. Classic phantom revenue.
▸ Check Cash Flow Statement
💡 Smart! No cash from ops. The revenue is fiction.
▸ Believe their growth story
😵 Oops. You’ve been dazzled by hype. Look again!
✒️ Game 3: The Gross Margin Mirage
A company reports 65% gross margin — but net profit is just 4%. What gives?
▸ Check SG&A Expenses
🔍 Exactly. Operating costs are eating margins alive.
▸ Review interest & tax
💸 High debt explains it. Gross profit is a decoy.
▸ Congratulate their pricing strategy
😅 Not so fast. Look beneath the gross!
✒️ Game 4: The Inventory Illusion
Inventory is growing faster than sales. Time for a deduction?
▸ Investigate obsolete stock
📉 You found excess goods with no demand. They’re capitalizing losses!
▸ Trust the CFO’s explanation
😬 He said “future demand.” You fell for it!
▸ Check cost flow method
🧮 They switched from FIFO to weighted average to delay COGS impact. Crafty!
✒️ Game 5: The Creative CapEx Conundrum
An acquisition-heavy firm shows increasing profits. But why no cash?
▸ Analyze capitalized costs
🧾 Boom! They’re capitalizing operating expenses as assets. Red flag!
▸ Follow the cash trail
💡 You spot cash bleeding through investments. The earnings are paper-thin.
▸ Celebrate their expansion
😵 Growth doesn’t mean value. Look closer!