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
━━━━━━━━━━━━━━━━━━━━━━━━
🔴 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 de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.