Core operating margins

CFA Level II
#1

Are INCREASING core operating margins and a spike in negative special items a sign of manipultation

or Is it

DECREASING core op margins and a spike in negative special items?

The CFAI text and EOCs seem to have opposing views on this… Can anyone help?

#2

A spike in negative special items boosts a falling core operating margin. The CFAI text and EOC are consistent. CFAI text says, a increase n core operating margin is “accompanied” by a spike in negative special items.

The EOC says falling core operating margin followed by a spike in negative special items( and increase in core operating margin)

#3

So is an increasing core op margin along with a spike in negative special items a sign of manipulation?

#4

A reversal of falling core operating margin to an increasing one accompanied by spike in negative special items is a sign of manipulation.

#5

Makes sense… Thanks!!