"It's not just bad, it's really bad. According to the information I learned from the five major accounting firms, ranging from HSBC, Hutchison Whampoa, Cheung Kong Holdings, New World, PCCW, Global, to those who do it every year

Almost 70% of small businesses that don’t even have a profit of 20 million Hong Kong dollars are in the red." Pisius said with a little joy.

Although in a falling market, making a bad financial report is already the most basic operation for listed companies, but making such a bad financial report is really beyond his expectation.

As shareholders, financial reports are the most important and accurate way for investors to understand listed companies. After all, if financial reports are falsified, the listed company, board of directors, and major shareholders will be legally responsible.

But does this mean that financial reports must be true and credible?

This may not necessarily be the case.

Listed companies can turn the company into a loss or profit through various legal channels.

For example, if a listed company obviously suffered a loss of 100 million, but because it owed a ten-year repayment contract and promised to repay 10 million every year, the loss that year would become 10 million.

At this time, if the listed company's other profits are greater than 10 million, then the listed company is profitable.

It is even easier to turn profits into losses. For example, if a listed company originally made a profit of 100 million, but wants to make a loss, then it claims to invest in a certain project with an investment amount of 200 million.

In one fell swoop, profits can go from 100 million to 100 million.

But even if there is room for manipulation in the financial report, it does not mean that the financial report is really that unreliable. If the time period is extended to ten years or more, the financial report can indeed accurately reflect a company's profitability.

The reason why listed companies do this is naturally to obtain higher stock prices.

Well, that's right, the reason for reporting a loss in the financial report is also for this purpose.

Generally speaking, when listed companies report financial losses, they are in a downward channel or even during a stock market crash.
Chapter completed!