Fundamental Analysis
A share price tells you what people are paying. It doesn't tell you what the business is worth. Here you learn to read a company's reports and form your own view of it.
This course is for you if
- You want to invest for years, not trade for days
- You are tired of buying stocks because someone else did
- You run a business and want to read another one's books
What you'll learn
Reading the business
- What the company sells and who it sells to
- Industry structure and competition
- Management, promoters and shareholding
The three statements
- Profit and loss statement
- Balance sheet
- Cash flow statement
- Where to find all of it in an annual report
Ratios that matter
- P/E, P/B and EV/EBITDA
- ROE and ROCE
- Debt to equity and interest cover
- Margins and growth rates
Valuation
- Comparing a company with its peers
- Introduction to discounted cash flow
- Margin of safety
Red flags and decisions
- Warning signs in the accounts
- Building a watchlist
- When a reason to hold has gone away
By the end, you'll be able to
- Read a company's annual report and pick out what matters
- Calculate and compare the main financial ratios
- Estimate whether a price looks expensive or cheap, and explain why
- Spot common warning signs in a company's accounts
What you need before joining
Comfort with the basics of shares and accounts. If you don't have that yet, begin with Stock Market Basics.
