Stock Market Investment: Applied Financial analysis

Explore how to conduct financial analysis for stock investments, starting with 10-K filings and financial statements, then apply ratios, trend analysis, and earnings quality to make informed decisions.

Interpret a company's financial statements to understand operating results, debt structure, and financial condition, using management discussion and analysis, footnotes, and ratio analysis to spot warning signs.

Explore the purpose of financial statement analysis and how investors, banks, suppliers, government, and employees use it to judge performance, forecast future results, assess financial strength, and guide decisions.

Recognize that financial analysis cannot predict the future with 100 percent accuracy, but points to general trends. Examine five-year sales trends and competitive forces to reduce risk or improve return.

Apply a structured financial statement analysis to profit, balance sheet, and cash flow statements using liquidity, profitability, and leverage ratios, plus common-size and trend reviews to forecast performance and risk.

analyze the profit and loss statement by evaluating revenue, the bottom line, and earnings quality, distinguishing core, sustainable earnings from non-core or low quality, and considering debt and cash flow.

Identify core business earnings by distinguishing core operations from non-core gains, and assess how market demand, contracts, pricing power, product mix, and acquisitions affect sustainability.

Examine how Cordlife’s core business—umbilical cord storage and stem cell services—drives earnings while revenue rises but profits diverge due to asset revaluations and fair value changes.

Explore the repeatability of earnings, learn to spot repeatable components in a profit and loss statement, and distinguish recurring from non-recurring items for financial analysis.

Analyze repeatability of earnings using a Hershey's case, highlighting goodwill impairment and write-downs from an acquisition, and their impact on profits and balance sheets for stock analysis.

Apply management judgment to assess revenue recognition, estimates, and potential manipulation in financial statements; examine channel stuffing, reserves, and earnings quality to gauge risk and valuation.

Examine how reserves and management judgment shape profit and loss by offsetting assets and liabilities, including receivables and warranties, and the risk of earnings stability.

Explore how acquisition price allocation affects goodwill on the balance sheet, depreciation of capital assets, and earnings, and why investors should scrutinize management explanations of overpay risks.

Assess how cash conversion links profits to cash flow by examining revenue recognition, receivables, and timely cash collection from customers; evaluate liquidity and operating cash flow.

analyzes cash conversion and cash flow in a real estate development company, explaining why profits rise while cash flow remains negative and cash is reinvested to fuel growth.

Explore common size analysis for the income statement, including horizontal and vertical sizing, using percentages of revenue and assets to compare financial figures across time.

Learn to perform common size analysis by extracting 10-K financial statements, building an Excel spreadsheet, and calculating horizontal year-over-year changes with sales as the base.

Examine common size analysis to spot trends and warning signs, like cost of goods as a percentage of revenue, debt, interest expense, and potential capitalization of expenses.

Analyze Micron's common size analysis to explain revenue declines and margin compression driven by price declines, costs, and industry dynamics.

Learn how to access free data for ratio analysis, focusing on profitability, growth, cash flow, financial health, and efficiency ratios using freely available sources such as Morningstar.

Apply ratio analysis to profit and loss and policy ratios, identify trends, and forecast performance. Calculate days sales outstanding and margins using retail examples to interpret credit terms and profitability.

Consolidate the profit and loss analysis into a single big picture, applying common size, horizontal, and vertical analyses to assess trends, core versus non-core items, and cash conversion.

Analyze the balance sheet to assess a company's financial condition, liquidity, asset and liability quality, and debt risk, including cash, marketable securities, and working capital.

Analyze balance sheet checkpoints to ensure assets and liabilities are fairly valued, review notes and MD&A, and assess reserves, impairments, and auditor opinions for true value.

Analyze subjective assets and liabilities on the balance sheet to identify valuation risk. Evaluate marketable securities and private debt, using intrinsic valuation and models to gauge true value.

Assess maturity matching by aligning current and non-current asset maturities with liabilities to ensure short-term obligations are met, preventing cash flow problems and debt mismatches.

Analyze liquidity using quick ratio and other balance-sheet ratios to assess assets versus liabilities, cash restrictions, debt covenants, and off-balance sheet obligations.

Explore common size analysis for the balance sheet and income statement, using horizontal and vertical analyses to show year-over-year changes as percentages of assets and reveal trends.

Demonstrates common size analysis on a balance sheet, showing vertical and horizontal calculations for assets, liabilities, and equity, using manual data from 10-K and Excel.

Apply common size analysis to GulfMark's case to reveal cash declines, asset write-downs, heavy long-term debt, and equity erosion amid a downturn in offshore oil and gas services.

Explore ratio analysis for stock valuation, covering current and quick ratios, debt-to-equity, equity ratio, and interest coverage, with focus on unusual changes and long-term trends.

Consolidate your balance sheet insights by valuing assets and liabilities, checking liquidity and maturity matching, and applying common size and vertical analyses, then apply debt-to-equity ratios to assess financial strength.

Learn the difference between cash flow and profit, and how the cash flow statement reflects operating activities, depreciation, and working capital from core business cash.

Identify basic cash flow checkpoints in the cash flow statement, differentiate operating cash flow from acquisitions and non-core items, and assess the impact of receivables and inventories.

Learn to assess repeatable cash flow in stock market investment by analyzing recurring vs non-recurring sources, supplier payments, receivables, and early payment discounts.

This lecture defines free cash flow as operating cash flow minus capital expenditures and cash paid for acquisitions, emphasizing reinvestment in tangible and intangible assets to sustain operations and competitiveness.

Explore cash flow ratios, focusing on operating cash flow to net income and to current liabilities, to assess liquidity, earnings quality, and capital structure changes over time.

Consolidate cash flow insights by analyzing cash flow statement's core business cash flows and adjustments to derive free cash flow, and assess liquidity via operating cash flow to current liabilities.

Analyze profit and loss, balance sheet, and cash flow statements using basic checkpoints, common size and ratio analysis to assess repeatable earnings, liquidity, and potential manipulation.