Ponzi schemes / Professional standards / Financial ratio analysis - Part two

• Ponzi schemes: Robbing Peter to pay Paul: Ponzi schemes, often referred to as pyramid schemes,typically involve the promise of high returns where earlier investors end paid off with monies raised from later investors. This scheme is named after Charles Ponzi, who tricked tens of thousands of New England residents into investing in a postage stamp speculation
  scheme back in the early 1920s.
• Professional standards that govern financial experts: Counsel has a myriad of factors to consider when deciding among financial experts. Does this expert have adequate
  practical experience? Has the expert testified previously? Does the expert have adequate communication skills to convey his or her professional opinion to the trier of fact? All of these are legitimate questions to ask, but you might be overlooking one important question: Does the expert have a history of complying with professional standards which govern all Certified Public Accountants (CPAs) who perform consultation and litigation services?
• Financial ratio analysis - Part two: Financial ratios provide insight into a company's financial condition and operational performance. In the last issue of Litigation Spectrum, we discussed liquidity and activity ratios. This article will focus on leverage and profitability ratios.