In this article, I will explain how the three financial statements are linked. This will be accomplished by providing an overview of the three financial statements and then navigating through an integrated financial statement model using a simple business model. The three financial statements are the cash flow statement, the income statement, and the balance […]
In this article, I will show you how to estimate the expected return of a stock investment. "Expected return" is an estimation of the long-term returns a stock is likely to generate if purchased at its current stock price. Often times, investors fail to estimate the return they'll be expecting on a stock investment, thereby […]
In this article, I will show you how to effectively read and analyze a cash flow statement. The cash flow statement tells investors and analysts how much cash is generated and used over a certain period, and is presented in quarterly (10-Q) and annual (10-K) reports. Every cash flow statement will list the value of […]
In this article, I will show you how to effectively read and analyze a balance sheet. This sheet is a snapshot of a company's financial position, and shows investors and analysts the worth of a company, also known as the "book" value. Typically, this sheet will be shared in quarterly (10-Q) and annual (10-K) reports, […]
In this article, I will show you how to effectively read and analyze an income statement. This statement summarizes all revenues and expenses over a particular period, and is presented in quarterly (10-Q) and annual (10-K) reports. The purpose of an income statement is to show a company's financial performance over a particular period, which […]
In this article, I will discuss the importance of Warren Buffett's circle of competence for investors. I will also explain how you can identify its boundaries, how you can expand your circle of competence, and how value investors can use this information to make smarter investment decisions. Put simply, the "circle of competence," a term […]
In this article, I will discuss why stock prices fall after beating earnings (aka good earning announcements), which is a common question many new investors ask around earnings season. The short answer to this comes down to the future expectations of analysts and investors, along with supply and demand. These two factors therefore drive much […]
In this article, I will cover 7 investments beyond the stock market that you can utilize alongside your stock market investments. Just as you should diversify what stocks you own, you should also diversify what assets you own as well. Beyond the stock market, there are a number of different assets you can invest in. […]
In this article, I will cover the 12 main reasons on why a stock price may change. After reading through this article, you should be able to apply this information to make more informed investment decisions in the future. It can be uneasy for new investors when they purchase a stock and see the stock […]