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The first thing any investor learns about is the importance of earnings to stock prices. The simple reasoning behind this is that a business is ultimately only worth what it can earn after paying down all its obligations. Earnings, however, can be distorted by all sorts of accounting maneuvers - one time events, interest, depreciation, […]
Fundamental analysis is a lot more qualitative than technical analysis. As we all know from the Enron scandal, financial statement in and of themselves are subject to the manipulations and approximations of the accountants and auditors who create them. That being said, assuming that the numbers reported are generally correct, it is possible to delve […]
Last but not least, the statement of cash flows. Here again is another link to an example cash flow statement. I would like to make mention that the company that I am using in all these examples is not an endorsement for it. It was completely random that I chose it and I have no […]
The second of the three sheets that we’ll look at is the Income Statement. The income statement is the financial statement used by companies to report their earnings, or income, hence the name. For reference, please click here (link will open in a new window) to see an example of an annual income statement available […]
When beginning to analyze a company based on fundamentals, nearly all the information you need is contained in The Three Sheets. The three sheets are the three major financial statements - the balance sheet, income statement, and statement of cash flows. These are must be reported by every publicly traded company as mandated by the […]
So, here we go again. Starting over the Fundamental Analysis series.
What is fundamental analysis? Fundamental analysis is the act of analyzing a company as a money-making business. The theory that drives this analysis is that, in the long run, a company’s stock price has to be directly related to its fundamental value as a business […]
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