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AuditLens - Profit Quality Analyzer

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๐Ÿ“Š AuditLens - Profit Quality Analyzer

Ever wonder if a company's profits are real or just accounting tricks?

This indicator helps you spot potential earnings manipulation by analyzing the gap between reported profits and actual cash generation.

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๐Ÿ” WHAT IT DOES
โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”

Calculates the "Divergence Ratio":
(Net Income - Operating Cash Flow) / Total Assets

โ€ข Positive divergence = Profits NOT backed by cash (risky)
โ€ข Negative divergence = Cash exceeds profits (healthy "cash cow")

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๐Ÿšฆ SIGNAL GUIDE
โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”

๐Ÿ”ด RED FLAG (>10%): High risk - possible aggressive revenue recognition
๐ŸŸ  ORANGE: Divergence trending up for 3+ quarters
๐ŸŸก YELLOW: Divergence trending up for 2+ quarters
๐ŸŸข GREEN (<-5%): "Cash Cow" - strong cash generation
โœ… HEALTHY (0 to -5%): Normal profit quality

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๐Ÿ“ˆ HOW TO USE
โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”

1. Add to any stock chart
2. Check the summary table (top right)
3. Look for RED FLAGS before buying
4. Prefer stocks with negative divergence (cash cows)

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โš ๏ธ FAMOUS EXAMPLES
โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”

โ€ข Enron (2001): Showed profits but burned cash โ†’ Bankruptcy
โ€ข Wirecard (2020): โ‚ฌ1.9B "cash" that didn't exist โ†’ Fraud
โ€ข Luckin Coffee (2020): Fake revenue, no cash backing โ†’ Delisted

This indicator would have flagged all of them.

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๐Ÿ”— FULL VERSION
โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”

Want more detailed analysis with:
โ€ข 6 advanced audit rules
โ€ข Historical trend analysis
โ€ข Receivables & Inventory checks
โ€ข Detailed reports for any stock

๐Ÿ‘‰ Try the full version FREE: auditlens-check.netlify.app

โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”
๐Ÿ“š THE LOGIC
โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”โ”

Based on forensic accounting principles:
- Companies can manipulate earnings (accruals)
- But cash flow is harder to fake
- Big gap between the two = potential red flag

This is NOT financial advice. Always do your own research.

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Built by AuditLens team ๐Ÿ”
Questions? DM or comment below.

Penafian

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