It's Earnings That Count: Finding Stocks with Earnings Power for Long-Term Profits (BUSINESS BOOKS) Paperback – 16 Oct. 2005

This is a great book to show you how to uncover the quality of earnings of companies. This book uses famous companies as examples (such as Enron, Worldcom, Cisco, Dell, Microsoft, The Gap, Tyco, and Wrigley).Some companies have lots of earnings (i.e. Enron) yet go busts. Heiserman Jr. explains clearly how we, as investors, should have sensed this impending doom. Only if this book has been out before the disaster, many investors would have been saved from losing their hard earned money.As importantly, Heiserman Jr. shows how to find great companies with consistent quality earnings (i.e Microsoft and Dell) that will multiple your investments.The methods employed by Heiserman Jr. were calculating "defensive earnings" and "enterprising earnings", and then use these earnings with the reported earnings, to plot the trends of the earnings.The easiest way to understand and benefit from these methods is to buy this book and read it! I've really enjoyed it and bravo to Heiserman Jr. for writing such a good book!

As an investor, I have to think about what earnings will be doing in the future, which can only be assessed by business analysis (products, competition, etc), but the earning history is an essential piece of data to get a grip on. This is a good book to have for the serious investor, but it is heavy going.