Fundamental Analysis
45 lessons in this track so far, in the order we suggest reading them.
Financial Statements
IntermediateReading Financial StatementsLearn how the income statement, balance sheet and cash flow statement fit together, where to find them and what traders look for first in a company's filings.IntermediateIncome StatementThe income statement shows a company's revenue, costs and profit over a period. Learn each line from revenue to EPS, a worked example and what traders watch.IntermediateBalance SheetThe balance sheet shows what a company owns, owes and the equity left for shareholders. Learn the main items, key ratios and red flags traders look for.IntermediateCash Flow StatementThe cash flow statement shows where a company's cash came from and where it went. Learn the three sections, how to read them and why cash flow can reveal problems.IntermediateRevenue and Gross ProfitRevenue is what a company sells; gross profit is what remains after direct costs. Learn revenue recognition, growth metrics, gross margin and what they reveal.IntermediateOperating Income, EBIT and EBITDAOperating income and EBIT measure profit from the core business; EBITDA adds back depreciation and amortisation. Learn the formulas, uses and EBITDA's flaws.IntermediateNet Income and EPSNet income is profit after all costs; EPS divides it by shares. Learn basic vs diluted EPS, GAAP vs adjusted EPS, buyback effects and how traders use EPS.IntermediateFree Cash FlowFree cash flow is cash left after running and investing in the business. Learn how to calculate FCF, FCF yield and conversion, and why investors value it highly.IntermediateWorking CapitalWorking capital is current assets minus current liabilities. Learn how receivables, inventory and payables affect cash, the cash conversion cycle and warning signs.IntermediateCapex, Depreciation and AmortizationCapital expenditures are spending on long term assets like factories and equipment. Learn maintenance vs growth capex, capex intensity and what capex signals.IntermediateGoodwill and Intangible AssetsGoodwill arises when a buyer pays more than an acquisition's net assets; intangibles include brands and patents. Learn how they are recorded and impaired.IntermediateDebt, Cash and Shareholders' EquityShareholders' equity is assets minus liabilities, the book value owned by shareholders. Learn its parts, how buybacks change it and why it can be negative.
Valuation
IntermediateValuation BasicsValuation estimates what a business is worth. Learn intrinsic vs relative valuation, the main multiples, how growth and risk affect value and common mistakes.IntermediateP/E and Forward P/EThe P/E ratio compares a stock's price with its earnings. Learn trailing vs forward P/E, earnings yield, what high or low P/E means and the ratio's limits.IntermediatePEG RatioThe PEG ratio divides P/E by expected earnings growth to compare growth stocks. Learn the formula, how to interpret it, worked examples and its important limits.IntermediateEV/EBITDA and EV/SalesEV/EBITDA and EV/Sales compare a company's total value, including debt, with its earnings or revenue. Learn how to calculate EV, when to use each and the limits.IntermediatePrice to Sales and Price to BookPrice to sales compares market value with revenue; price to book compares it with net assets. Learn the formulas, when each works best and their main pitfalls.IntermediateFree Cash Flow Yield and Dividend YieldDividend yield is the annual dividend divided by the share price. Learn the formula, payout and coverage ratios, dividend growth and how to avoid yield traps.IntermediateDCF ValuationA DCF values a company by forecasting free cash flows and discounting them to today. Learn the steps, a worked example, sensitivity analysis and common mistakes.IntermediateTerminal ValueTerminal value captures a company's worth beyond the forecast period. Learn the Gordon growth and exit multiple methods, with examples and sanity checks.IntermediateWACC and Cost of EquityWACC blends the cost of equity and the after tax cost of debt into a discount rate. Learn CAPM, beta, the equity risk premium, a worked example and common pitfalls.IntermediateComparable Companies and Precedent TransactionsComparable company analysis values a business using the multiples of similar companies. Learn how to pick peers, build a comps table and adjust for differences.IntermediateSum of the Parts ValuationSum of the parts values each business segment separately and adds them up. Learn the method, the conglomerate discount, a worked example and how it spots catalysts.
Company Analysis
IntermediateRevenue Growth and Margin AnalysisProfit margins show how much of each dollar of sales a company keeps. Learn gross, operating, EBITDA and net margins, how to analyse trends and what drives them.IntermediateOperating and Financial LeverageOperating leverage comes from fixed costs; financial leverage comes from debt. Learn how each magnifies profit swings, the key formulas and what they mean for risk.IntermediateROE, ROA and ROICROE, ROA and ROIC show how efficiently a company turns capital into profit. Learn the formulas, the DuPont breakdown, why ROIC versus WACC matters and the pitfalls.IntermediateEarnings Quality and Cash ConversionEarnings quality asks whether reported profits are real, repeatable and backed by cash. Learn accruals, warning signs, the Beneish model and famous frauds.IntermediateCapital Allocation and ManagementCapital allocation is how management spends a company's cash on reinvestment, deals, dividends, buybacks or debt. Learn how to judge good and bad decisions.IntermediateCompetitive Advantage and MoatsAn economic moat is a durable advantage that protects a company's profits from rivals. Learn the main sources, how to spot them in the numbers and how they erode.IntermediateUnit EconomicsUnit economics measures profit per customer or unit sold. Learn lifetime value, acquisition cost, payback period, churn and how investors use these metrics.IntermediateTechnical vs Fundamental AnalysisTechnical analysis studies price and volume; fundamental analysis studies business value. Compare their methods, horizons and evidence, and how to combine them.
Earnings
IntermediateEarnings Season ExplainedEarnings season is when most public companies report quarterly results. Learn the calendar, what is in a report, how consensus works and how markets react.IntermediateAnalyst Estimates, Surprises and Whisper NumbersAn earnings surprise is the gap between reported results and expectations. Learn how surprises are measured, why beats are common and how stocks react.IntermediateGuidance and Earnings RevisionsCompany guidance and analyst estimate revisions shape expectations. Learn how guidance works, why revisions predict returns and how traders track them.IntermediateEarnings CallsEarnings calls are where management discusses results and answers analysts. Learn the structure, the signals in tone and Q&A, and how to use transcripts.IntermediateEarnings Reactions and Post-Earnings DriftPost earnings drift is the tendency for stocks to keep moving in the direction of an earnings surprise for weeks. Learn the research and how traders use it.
Corporate Events
IntermediateDividendsDividends are cash payments companies make to shareholders. Learn the key dates, types of dividends, dividend policy, taxes and their effect on prices and options.IntermediateStock SplitsA stock split increases share count and lowers price without changing company value. Learn how splits and reverse splits work, why they happen and the reaction.IntermediateMergers and AcquisitionsMergers and acquisitions combine companies through cash or stock deals. Learn deal types, premiums, synergies, approvals and how target and buyer stocks react.IntermediateSpin-OffsA spin off separates a business into a new listed company owned by existing shareholders. Learn how spin offs work, why they happen, forced selling and the evidence.IntermediateIPOsAn IPO is when a private company first sells shares to the public. Learn the process, pricing, first day pops, lockups, direct listings and SPACs.IntermediateSecondary Offerings and Rights OfferingsSecondary offerings sell more shares after an IPO, either new shares or existing holders' stakes. Learn the types, dilution, discounts and how stocks react.IntermediateBuybacksShare buybacks are companies repurchasing their own stock. Learn how buybacks work, their effect on EPS, when they create value, the controversies and the evidence.IntermediateBankruptcy and RestructuringWhen companies cannot pay their debts, they restructure or go bankrupt. Learn Chapter 11 vs Chapter 7, the priority of claims and what happens to stocks.IntermediateIndex RebalancingIndex rebalancing forces funds to buy additions and sell deletions. Learn how S&P 500 and Russell changes work, the index effect and closing auction flows.