OPEN-SOURCE SCRIPT
AuditLens - Profit Quality Analyzer
📊 AuditLens - Profit Quality Analyzer
Ever wonder if a company's profits are real or just accounting tricks?
This indicator helps you spot potential earnings manipulation by analyzing the gap between reported profits and actual cash generation.
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🔍 WHAT IT DOES
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Calculates the "Divergence Ratio":
(Net Income - Operating Cash Flow) / Total Assets
• Positive divergence = Profits NOT backed by cash (risky)
• Negative divergence = Cash exceeds profits (healthy "cash cow")
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🚦 SIGNAL GUIDE
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🔴 RED FLAG (>10%): High risk - possible aggressive revenue recognition
🟠 ORANGE: Divergence trending up for 3+ quarters
🟡 YELLOW: Divergence trending up for 2+ quarters
🟢 GREEN (<-5%): "Cash Cow" - strong cash generation
✅ HEALTHY (0 to -5%): Normal profit quality
━━━━━━━━━━━━━━━━━━━━━━━━
📈 HOW TO USE
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1. Add to any stock chart
2. Check the summary table (top right)
3. Look for RED FLAGS before buying
4. Prefer stocks with negative divergence (cash cows)
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⚠️ FAMOUS EXAMPLES
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• Enron (2001): Showed profits but burned cash → Bankruptcy
• Wirecard (2020): €1.9B "cash" that didn't exist → Fraud
• Luckin Coffee (2020): Fake revenue, no cash backing → Delisted
This indicator would have flagged all of them.
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🔗 FULL VERSION
━━━━━━━━━━━━━━━━━━━━━━━━
Want more detailed analysis with:
• 6 advanced audit rules
• Historical trend analysis
• Receivables & Inventory checks
• Detailed reports for any stock
👉 Try the full version FREE: auditlens-check.netlify.app
━━━━━━━━━━━━━━━━━━━━━━━━
📚 THE LOGIC
━━━━━━━━━━━━━━━━━━━━━━━━
Based on forensic accounting principles:
- Companies can manipulate earnings (accruals)
- But cash flow is harder to fake
- Big gap between the two = potential red flag
This is NOT financial advice. Always do your own research.
━━━━━━━━━━━━━━━━━━━━━━━━
Built by AuditLens team 🔍
Questions? DM or comment below.
Ever wonder if a company's profits are real or just accounting tricks?
This indicator helps you spot potential earnings manipulation by analyzing the gap between reported profits and actual cash generation.
━━━━━━━━━━━━━━━━━━━━━━━━
🔍 WHAT IT DOES
━━━━━━━━━━━━━━━━━━━━━━━━
Calculates the "Divergence Ratio":
(Net Income - Operating Cash Flow) / Total Assets
• Positive divergence = Profits NOT backed by cash (risky)
• Negative divergence = Cash exceeds profits (healthy "cash cow")
━━━━━━━━━━━━━━━━━━━━━━━━
🚦 SIGNAL GUIDE
━━━━━━━━━━━━━━━━━━━━━━━━
🔴 RED FLAG (>10%): High risk - possible aggressive revenue recognition
🟠 ORANGE: Divergence trending up for 3+ quarters
🟡 YELLOW: Divergence trending up for 2+ quarters
🟢 GREEN (<-5%): "Cash Cow" - strong cash generation
✅ HEALTHY (0 to -5%): Normal profit quality
━━━━━━━━━━━━━━━━━━━━━━━━
📈 HOW TO USE
━━━━━━━━━━━━━━━━━━━━━━━━
1. Add to any stock chart
2. Check the summary table (top right)
3. Look for RED FLAGS before buying
4. Prefer stocks with negative divergence (cash cows)
━━━━━━━━━━━━━━━━━━━━━━━━
⚠️ FAMOUS EXAMPLES
━━━━━━━━━━━━━━━━━━━━━━━━
• Enron (2001): Showed profits but burned cash → Bankruptcy
• Wirecard (2020): €1.9B "cash" that didn't exist → Fraud
• Luckin Coffee (2020): Fake revenue, no cash backing → Delisted
This indicator would have flagged all of them.
━━━━━━━━━━━━━━━━━━━━━━━━
🔗 FULL VERSION
━━━━━━━━━━━━━━━━━━━━━━━━
Want more detailed analysis with:
• 6 advanced audit rules
• Historical trend analysis
• Receivables & Inventory checks
• Detailed reports for any stock
👉 Try the full version FREE: auditlens-check.netlify.app
━━━━━━━━━━━━━━━━━━━━━━━━
📚 THE LOGIC
━━━━━━━━━━━━━━━━━━━━━━━━
Based on forensic accounting principles:
- Companies can manipulate earnings (accruals)
- But cash flow is harder to fake
- Big gap between the two = potential red flag
This is NOT financial advice. Always do your own research.
━━━━━━━━━━━━━━━━━━━━━━━━
Built by AuditLens team 🔍
Questions? DM or comment below.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.
Script open-source
Nello spirito di TradingView, l'autore di questo script lo ha reso open source, in modo che i trader possano esaminarne e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricordiamo che la ripubblicazione del codice è soggetta al nostro Regolamento.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.