There's an old rule about accounting that my Foolish dueling partner Rick Munarriz seems to have forgotten when it comes to Coca-Cola
Since so much of accounting is open to interpretation, it makes tremendous sense to look for companies whose operations are significantly stronger than their reported earnings would indicate. That is, of course, unless your idea of a good investment is buying the next Enron, Worldcom, or Adelphiabefore they unravel. Granted, if you buy after a company hits rock bottom, the aftermath of an accounting scandal might be a great (though high-risk) place to find a deeply discounted company. Tyco
In most cases, as an investor, you're far better off buying companies like Coca-Cola. The most aggressive part of its accounting is the fact that its bottlers, like Coca-Cola Enterprises
The Foolish bottom line
As a fundamentally solid company that absolutely gushes cash, Coca-Cola is certainly worthy of any serious investor's consideration. Just be sure to look at its cash flow to see the true strength behind the business.
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