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![FluentInQuality Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::1618932321679282178.png) Yorrin | FluentInQuality [@FluentInQuality](/creator/twitter/FluentInQuality) on x 2570 followers
Created: 2025-07-08 17:58:51 UTC

Review annual reports with a skeptic’s eye.
Study the balance sheet, income statement, and cash flow statement not to confirm why you like the business, but to find reasons you shouldn’t.

Look for red flags:
• Weak or deteriorating margins
• Aggressive use of leverage
• Low return on capital
• Aggressive revenue recognition
• Excessive stock-based compensation
• Ballooning receivables or inventory

Avoid confirmation bias. Your job isn’t to fall in love with the company. It’s to make sure you’re not ignoring the risk staring you in the face.


XXX engagements

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**Related Topics**
[cash flow](/topic/cash-flow)
[balance sheet](/topic/balance-sheet)

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