REAL REVENUE?

Physician's Money Digest, June30 2003, Volume 10, Issue 12

Tip:

Physician-investors now know theharsh effects that fraudulent revenuereports can have on their retirementinvestments. Not too long ago, companieslike Enron and WorldComwere fudging the numbers when itcame to booking revenues, often bylisting phantom income from swapdeals that generated no real profits.And recently some other well-knownfirms have also revised their incomestatements, often citing revenue recognitionproblems as the culprit.Among those caught in the restatementnet was Duke Energy, whichlowered its 2001 revenues by almost80% from $61.3 million to $12.7 million.Duke Energy's shareholderstook a hit, too, as the stock plunged65% to $12.75 a share. Watch acompany's cash flow statement—cashfrom operations should be in linewith any profits the company reports.