Author: Chiranjiv Kumar

28Dec

9 Legal Ways to Inflate Profits

A company may want to increase its profits to increase its share value in the market, to improve credit worthiness of the company, to get more public exposure, to prevent itself from takeovers and to have a bargain position while making acquisition deals.

  1. Inflate sales – Double the units of sale or triple it as per need. Then at the end of the financial year, just reverse it showing it as sales return. Now, how the profit is inflated? In quarterly results of the company, the profit is inflated thereby increasing credit worthiness which can be used to dominate acquisition deals or further public issues.
  2. Charge less depreciation – Depreciation is a non-cash flow. So it can be modified to any value by making a policy change in the books. A reduction in depreciation means more profit.
  3. Convert long term to short term assets – During revaluation of short term assets, a part of fixed assets can be transferred to current assets (i.e. short term assets) and can be revalued and shown as an income in the P/L account to inflate profit further. Read More »
26Dec

9 Ways to Spot and Avoid a Hater

Hater, the most dangerous and disastrous creatures of all others who will make you believe that the gold you have is not a gold but coal. Haters can be of two types, a developed hater (who is a professional hater) and developing hater (who is becoming a hater). You need not to be celebrity to have haters. Haters are found everywhere in one way or another. Haters are not critics. Critics provide useful advice bonafide but haters have malafide intentions. I will discuss how to spot a hater and how to avoid one. Read More »

19Dec

Indian Coal Scam – Mother of all Scams

WHAT WAS THE SCAM?

Coal block is the largest political scandal till date and is referred to as the “Mother of all scams”.

Coal blocks allocations by the government between 2004 and 2009 were found to be issued without competitive bidding and at very low prices because of which government suffered a loss of roughly ₹ 10 Lakhs Crores but further amended to ₹ 1.85 Lakhs Crores by the CAG in its final draft report. Read More »

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