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Chapter 8. Earnings Tricks and Games: Ma... > Red Flag 3: When a One-Time Charge B...

Red Flag 3: When a One-Time Charge Becomes a Permanent Part of Results

Imagine every year telling your bank manager that spending much more than you are earning is not a problem because you have decided to take a one-time charge to restructure a part of your life, your job, or your relationship with someone. Well, that is exactly what companies do to investors when they constantly take one-time charges for this restructuring or for those lay-offs or for this or that liability arising from a lawsuit—and any number of other reasons. The idea they try to get across is that as these are so-called one-time items, this isn’t real money. They try to get investors to focus on earnings before these items.


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