[somethoughts]

One thing to watch out for - is to look at continued growth of the line item - Goodwill and Intangibles on the balance sheet. Goodwill is when it pays well over book value to buy another company. Intangibles are hard to value assets like IP (a movie library, patents, etc.).

Excessive goodwill occurs when a legacy company can no longer organically grow earnings so it has to buy other companies (perhaps over paying) to show earnings growth.

Intangibles can make a debt laden balance sheet less negative if the value of "synergy and secret sauce" are over stated and never written down.

You can see GE's Goodwill and Intangibles peaked in 2017 when Jeffrey Immelt got replaced and John Flannery started to do the write-downs for which he was sacked. Larry Culp seems to be doing it more even handedly.

https://www.wsj.com/articles/how-ge-built-up-and-wrote-down-...

https://www.macrotrends.net/stocks/charts/GE/general-electri...

[lotsofpulp]

Governments do this with deferred compensation schemes like defined benefit pensions and retiree healthcare. There are conveniently no laws around calculating the cost of benefits, and of course no recourse for today’s leaders not funding them in the first place, so they can hide a lot of today’s labor costs in understated pension and retiree healthcare liabilities.