Fundamental Analysis¶

Fundamental analysis assesses a company by looking at its financial statements to evaluate its health and value, and compares them across time and against competitors.

Financial Statements¶

Balance Sheet¶

It’s a snapshot.

Income Statement¶

Cash Flow Statement¶

Intermediary Metrics¶

Accounting Ratios¶

Liquidity Ratios¶

These ratios measure the availability of cash to pay debt.

Activity (Efficiency) Ratios¶

These ratios measure how quickly a firm converts non-cash assets to cash assets.

Profitability Ratios¶

These ratios measure the firm’s use of its assets and control of its expenses to generate an acceptable rate of return. Profitability ratios measure a company’s ability to generate income relative to revenue, balance sheet assets, operating costs, and equity.

Market Ratios¶

These ratios measure investor response to owning a company’s stock and also the cost of issuing stock.