Read financial statements as a stock investor
4.1 (14 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
148 students enrolled

Read financial statements as a stock investor

A life-skill to pick up critical values and essential numbers from financial statements for stock investing & selection.
4.1 (14 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
148 students enrolled
Created by Brennen Pak
Last updated 5/2020
English
Current price: $13.99 Original price: $19.99 Discount: 30% off
5 hours left at this price!
30-Day Money-Back Guarantee
This course includes
  • 3 hours on-demand video
  • 1 article
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
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What you'll learn
  • Acquire useful practical skills based on financial statements.
  • Identify the good and bad stocks from the financial statements within 30 minutes.
  • Be able to make a quick quantitative assessment of stocks based on the right numbers from the financial statements.
Requirements
  • No knowledge required
Description

This course is to enable newbie or keen stock investors to arm with some basic skills in reading financial statements. The ability to read financial statements is the first step to be a good stock investor. It is a financial language that all stocks wannabe should aim to acquire to significantly augment the success rate in stock investments.

When one comes across the financial statements of a stock, the first thing that an investor should do is to be able to identify whether that stock is a good stock or a bad one. If the stock is a good one, what makes the company successful. And if the stock is a lousy one, then what makes it to be bad. This course aims to arm you with just that, at least at the first level.

As this is a course for the newbies and keen stock investors, we do not expect anything from the audience other than an enthusiastic learning mind to pick up some basic skills to increase your success rate in picking up stocks.

This is a basic but powerful course. It takes only about 2 hours of your time to focus on the essentials taught in the lessons. Pick up some skills for just a song! 

Who this course is for:
  • For stock investors, particularly the newbies and stock investors wannabes, who want to start with fundamental analyses.
  • For veteran stock traders who want to start on value investing.
  • For students who want to learn more about financial statements and their applications.
  • This course is not meant for practice accountant or train one to become an accountant or an account executive. Its objective is to help students identify good stocks and bad stocks fairly quickly using financial statements.
  • This course is not meant for investors who look for quick-fixed solution to their stocks that have deteriorated in value.
  • Students shall not ask instructors to analyse stocks other than those discussed in the course. The instructors are not stock analysts who special in specific stocks.
Course content
Expand all 23 lectures 02:56:14
+ Introduction to READ THE FINANCIAL STATEMENTS AS A STOCK INVESTOR
2 lectures 07:51

The introduction is to explain what are financial statements and who are interested in financial statements of companies. The introduction also outlines the scope of the course to enable students better understand the significance as well as the depth level of the course.

Preview 04:11

This lecture is to help frame the expectations of students. Doing a course to learn about the stock market is not going to turn someone from a rookie to an expert overnight no matter how good the course is. This is especially so for a beginner's course as students have not attained even the necessary basic skills to tackle the ever-changing business environment affecting the stock market. Students need to be aware of the following:

  1. Learning a skill to buy or sell stock is not as simple as learning a classroom academic subject whereby everything is within the control of the student.
  2. While certain skills such as mathematics as well as calculations in the course can be learnt. However, there are many factors out there that can affect the performance of the market, and hence, the performance of our stocks. In other words, there are controllable as well as uncontrollable factors affecting our stocks.
  3. Consequently, it does not mean that by learning all these skills, one would win in every stock in the stock market, but certainly a lack of these skills will see us perform miserably in the long run.
  4. There are also personal traits such as mental fortitude and human emotions that can also affect our performance, and these skills are dependent very much on the upbringing and personal life experience of the stock trader or investor himself. Idealy, students should have some life experience in stocks trading himself to better appreciate the contents in this course.
Preview 03:40
+ The balance sheet
4 lectures 35:53

This section teaches you what is a balance sheet. Essentially,

  1. The balance sheet is the financial situation or position of the company at a certain point in time.

  2. The items in a balance sheet:

  3. Why the balance sheet is always balance.

Preview 10:33

This lecture explains what is a group and a company. It also explains and what is minority interest or non-controlling interest that we often find in the financial statements. Once you grasp these concepts, you are in better position to understand financial statements when you read them. Some companies provide details of group as well as companies in their financial statement. It is important what students should know how to differentiate between the two ensure that they are using the right data for their analyses. 

The balance sheet - Group, company and minority interest
03:58

In this video, we shall participate in a quiz to help reinforce our understanding about the balance sheet. If you able to confidently answer how the company is able to finance its asset purchase, you should have attained the requirement of this section. Congratulations!

The Balance Sheet - Reinforcing your understanding
06:55
Identifying good (and bad) companies from the Balance Sheet
14:27
+ Income statement
6 lectures 43:40

1. The income statement records all the transactions and the cost incurred during the whole financial year. ie. from the 1st day of the financial year to the last day of the financial year.  After the close of the financial year, the accountant would then compile and consolidate all these transactions together into an income statement. This will enable a reader, like us as investors, would then able to know whether the company is earning a profit or incurring a loss based on all the transactions for the whole year.  Consequently, the income statement tells us the performance of the company for that financial year.

2. The video explains the various components that goes into the income statement.

3. Students should learn how to pick up important figures from the income statement.

4. Note that income statement is NOT the same as cash flow statement.   

Income Statement - The Essentials
06:49

1. The income statement records all the transactions and the cost incurred during the whole financial year. ie. from the 1st day of the financial year to the last day of the financial year.  After the close of the financial year, the accountant would then compile and consolidate all these transactions together into an income statement. This will enable a reader, like us as investors, would then able to know whether the company is earning a profit or incurring a loss based on all the transactions for the whole year.  Consequently, the income statement tells us the performance of the company for that financial year.

2. The video explains the various components that goes into the income statement.

3. Students should learn how to pick up important figures from the income statement.

4. Note that income statement is NOT the same as cash flow statement.   

The Income Statement - The Essentials (Part II)
08:19

This video clip describes what the income statement of a bank looks like.

Income statement - A bank
06:30

The video describes the income statement of a transport company

Income statement - Land Transport company
08:22
Income statement - Is profit equals to cash
04:14
Income statement - summary
09:26
+ Cash flow statements
3 lectures 22:22
The cash flow statement - The essentials
11:32

This video clip picked up some of the danger signs that you should look out for when examining the cash flow statement.

The cash flow statement - danger signs
05:59
Cash flow statement - The concept of free cash flow
04:51
+ Statement in changes of Equity
1 lecture 05:35

The statement of changes in equity is often a forgotten financial statement. Nevertheless, it provides us some information with regards to how the equity changes during the FY.

Statement of changes in equity - The essentials
05:35
+ Bonus Concepts
4 lectures 37:55
Bonus Concept - Profitability Ratios
09:42

PE ratio is an important and widely used concept to determine whether a stock is expensive or cheap. It can be used to compare among peers as well as the corporate with the industry. For example, if the PE of the company that you are interested has a PE of 18.94, but the peers and industry is trading at PE of 24, then the company stock price is considered to be cheap compare to the industry or peers. Then from an investment point of view, you should be buying this stock. Of course, if the PE that you calculated is 30, but its peer is only trading at 24, then the stock is considered to be expensive against its peers.


However, one needs to be careful of the use of PE because if the economy is doing well, it is expected that PE in general will go up, and the whole industry PE will be up. Conversely, if the economy is in a recession, the PE can be low.


PE can also be used to compare against time. From time to time, share price can change (in fact, it changes everyday), while earnings tends to change at most every quarter. So, by knowing the PE movements, one can decide whether a stock price is cheap or expensive. In the way, it gives us an indication to buy or to sell a stock.


This bonus concept on PE ratio is not exactly in the course syllabus as the course covers only the reading of the annual report. However, given that most of the students are already investors or potentially of becoming one, I provide this bonus video to enable students better make use of these concepts in buying or selling of stocks.     

Bonus Concept II - Price to Earnings Ratio (PE Ratio)
11:01
Bonus Concept III - Cash flow
07:12
Bonus Concept IV - Evaluating metrics on per share basis
10:00
+ The round -up
1 lecture 12:13

This lecture is a round-up of what we have learnt during the course. As it is a beginners' course, it is important that students be informed of what one is expected to do as a next step to attain higher proficiency in becoming an outstanding stock investor.

The round-up
12:13
+ COURSE SUPPLEMENTS
2 lectures 10:45
Course supplement #1 - update on 11 March 2016
10:30
Bonus lecture
00:15