How To Read An Income Statement For A Company I Might Invest In
Read an income statement top-down as a funnel from revenue to net income, focusing on gross margin, operating margin, and the trend in earnings per share to see if the...
Financial Statements
Shows where to find specific items like debt, depreciation, and dividends on standard financial statements.
What Does Goodwill On A Balance Sheet Mean After An Acquisition
Goodwill after acquisition is the premium a buyer paid above the fair market value of the acquired company’s identifiable net assets, essentially capitalizing the unspottable value of brand, customer loyalty,...
What Is A Cash Flow Statement And Why Does It Matter More Than Profit
A cash flow statement matters more than profit because it reveals the actual liquidity and timing of money moving in and out of your business, while profit is merely an...
What Is Free Cash Flow And How Do I Calculate It From A 10-K
Take net cash from operating activities, subtract capital expenditures (found in the investing section, often labeled 'purchases of property, plant and equipment'), and adjust for any capitalized software or acquisition-related...
What Is Working Capital And How Do I Know If A Company Has Enough
A company has enough working capital if its current ratio is between 1.2 and 2.0, but you must strip out low-quality assets like stale inventory and compare the result specifically...
How Do The Three Main Financial Statements Fit Together
Net income from the income statement flows into retained earnings on the balance sheet and serves as the starting point for the cash flow statement, while the cash flow statement's...
What Are Pro Forma Earnings And Should I Trust Them Over GAAP Numbers
Pro forma earnings are a company's reported profits with certain non-recurring items removed to show 'normalized' operating results, but you should generally not trust them over GAAP numbers because management...
Financial Statements Analysis
Start with the big picture: how financial statements analysis connects them Financial statements analysis begins before you judge a single number: step back and see how the three main financial...
Accounting Fundamentals & Concepts
Why accounting fundamentals matter Mastering accounting fundamentals means understanding that the purpose of accounting in society is to provide the quantitative financial information that allows people, institutions, and governments to...
Cash Flow & Balance Sheet
Start here: how cash flow management connects the statements Understanding why cash flow management is important to a business begins with seeing that the income statement, balance sheet, and cash...
Accounting
Start with the accounting fundamentals, not the ledger Before you open a single report, it helps to ground yourself in the accounting fundamentals & concepts that make every number interpretable,...
How To Calculate Dividends From The Income Statement
To calculate dividends from the income statement, start with the company's net income, the bottom-line profit after all expenses and taxes, then apply either the dividend payout ratio or the...
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