When the economy in the region tanked he could no longer


Ever since he was a kid, Carl Montague wanted to be a pro football player. When that did not work out, he found another way to channel his natural competitive spirit: He bought a small auto parts store in Kentucky that was deep in red ink (negative earnings). At the end of the year, he created ghost inventory by recording fake inventory purchases. He offset these transactions by adjustments to Cost of goods sold, thereby boosting profit and strengthening the balance sheet. Fortified with great financials, he got bank loans that allowed him to build up a regional chain of stores, buy a local sports franchise, and take on the lifestyle of a celebrity. When the economy in the region tanked, he could no longer cover his losses with new debt or equity infusions, and the whole empire fell like a house of cards.

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Microeconomics: When the economy in the region tanked he could no longer
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