The 2nd Annual Veritas Vision 20/21 Series Outlining
Critical Accounting Issues In Each Sector Under Our Coverage

Why Accounting Matters Now More Than Ever

At Veritas, we pay close attention to accounting details and nuances as it helps us cut through the noise and focus on sustainable cash flow so that we can value a business properly.

Paying such close attention to the details also helps us identify warning signs or opportunity flags that the market hasn’t picked up on yet.

We believe accounting matters now more than ever because many of the checks and balances that have helped keep companies honest in the past are breaking down. As imperfect as they are, financial statements and company disclosures offer an early warning system so that you can avoid painful extreme losses.

Please read further as we’d like to share with you complimentary access to the Introduction of our 2nd Annual Vision 20/21 Series, which includes a “Guess the Company That Blew Up” game.

Anthony Scilipoti
President and CEO

and

Darryl McCoubrey
Head of Research

 

Enjoy Complimentary Access

Introduction: Why Accounting Matters More Now Than Ever

 

Let's Play a Game: 

A lot of smart people have said over the years that history is doomed to repeat if you don’t learn from it. 
As part of the introduction, we have collected five excerpts from five companies’ letters to shareholders over the past 20 years, changing a few details to keep each company anonymous.
See how many you can get right.

The Veritas
Accounting Subscription

It isn't just institutional investors and professional investors who subscribe to our research.

We also have accounting regulators, auditors, academics, private equity firms, corporate finance teams, boards, and investor relations departments that subscribe.

Some get full access to all our investment research. Others subscribe to our accounting-focused reports.

What will our Accounting Subscription do for you?

Dissect
complex financial reporting and valuation methodologies.

• Stay on top
of what’s new in financial disclosure and accounting regulation.

Maintain a firm grip
on how institutional investors interpret and analyze financial statements.

• Connect
accounting choices and the quality of governance to long-term shareholder returns.  

What you get 

• Accounting Alerts • Monthly Accounting Vigils • Annual Vision 20/20 Series • Weekly Veritas Journal Newsletter • Fact-Finding Video Conference Series • Analyst Webinars

*****

Contact Sales for report examples and a trial subscription

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The Vision 20/21 Series


(For clients)

Chapter 1: Understanding Credit Card Risk at Retailers Versus Banks

This report highlights the impact of IFRS 9 adoption on credit card performance at Canadian Tire, Loblaw, and the Big Six Canadian Banks before and after the pandemic.

Only by studying quarterly performance over the past three years can investors appreciate risk at each company during normal economic and extreme economic circumstances. 


Chapter 2: Accounting Amps Up IPP Returns

Few sectors can match capital structure complexity with Canada’s Independent Power Producers (IPPs). Our review of eight Canadian IPPs reveals that on average GAAP understates enterprise value by 18%, while sector EBITDA is overstated by 4%. 

Taken together, our observations imply EV-to-EBITDA ratios can be overstated by more than 20%. 

This report normalizes EV and EBITDA at Algonquin Power & Utilities Corp. (AQN), Boralex Inc. (BLX) Brookfield Renewable Partners LP (BEP_u), Capital Power Corporation (CPX), Innergex Renewable Energy Inc. (INE), Northland Power Inc. (NPI) TransAlta Renewables Inc. (RNW) and TransAlta Corporation (TA).


Chapter 3: Sometimes Operating Cash Flow Isn't All That It Seems 
      
When evaluating a free cash flow, most investors start with operating cash flow (OCF) as reported on a company’s financial statements.  Generally, a high and consistent level of OCF is a good sign of business health and sustainable cash generating ability. 
 
But what if reported OCF isn’t actually generated from a company’s operations, but rather through other sources not directly tied to its core business?  In this situation, a company’s operational health could appear better than it actually is.

We look at how Bombardier’s former transportation segment boosted consolidated OCF from changes in working capital that were more akin to financing sources rather than operationally generated.

More coming soon.