Quality of Earnings Triangulation
What is Quality of Earnings Triangulation?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
// THE SHORT ANSWER
Quality of Earnings Triangulation is the method of testing reported profit from three angles at once rather than accepting any single one: profit-to-cash conversion, balance sheet velocity — the movement in debtor and inventory days — and the language of the disclosure itself. Triangulation is the operative word. Each angle can be explained away alone; the three disagreeing with each other is the signal, and it appears before the numbers themselves turn.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
// IN THE BOOK
Developed in chapter 4, Reading the Numbers Behind the Numbers.
// WORKED IN
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