Techniques of Fundamental Stock Analysis

Before diving into this module I would suggest you study the pre-cursor to this one which is the Fundamental Stock Analysis & Financial Statements module which explains how to read the various financial statements such as the balance sheet, cash flow statement, and income statement which are an integral part of the reporting of company accounts. Here we take this knowledge and apply it in various ways using a primary technique called ratio analysis in which we extract the data and study what the ratios reveal by comparing the various results.

Here, I cover all those I believe are essential tools, the pros, and cons, how to apply them, and what they reveal. Finally, we round off with two other key ratios, the Piotroski score, and the Altman Z score. All are explained from first principles so you understand how they are constructed, important to know when comparing them across stock screeners. There is one PDF that should be read in conjunction with this module and that's the one entitled Return On Invested Capital (ROIC) Ratio which examines this single ratio in detail. And the reason for this is that I consider it to be one of fundamental importance to all stock investors, and therefore demanding a section all of its own.

Lessons