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Fundamentals
Financial Statements
- Price vs Value25 min read · A price is what the last buyer and seller agreed on; a value is an estimate of cash flows
- The Income Statement35 min read · Revenue minus cost of goods sold is a gross profit that measures the product; subtracting
- The Balance Sheet35 min read · Assets equal liabilities plus equity, always, because equity is what the arithmetic
- The Cash Flow Statement35 min read · Profit is an accrual opinion and cash is a fact, so the statement that reconciles them is
- How the Three Statements Link35 min read · The three statements are one model with three views.
Analysis and Earnings Quality
- Profitability and Returns: ROE, ROIC, DuPont35 min read · Return on equity is a residual return to a levered claim, so the same number can mean
- Growth, Reinvestment and Moats35 min read · Growth = reinvestment rate × return on invested capital, and only the second term decides
- Earnings Quality and Red Flags35 min read · Earnings quality is the gap between the profit a company reports and the cash it
- Reading a 10-K, 10-Q and Earnings Call35 min read · A 10-K is a legal document written to disclose, not to inform, so the reading order is a
- Time Value and Discounting30 min read · A dollar next year is worth less than a dollar today by exactly the rate you demand for
- Cost of Capital: CAPM and WACC35 min read · The cost of capital is the return a company has to earn to leave its investors no worse
- DCF Modelling40 min read · A DCF is a way to make your assumptions explicit rather than a way to discover what a
- Relative Valuation: P/E, EV/EBITDA, P/S, P/B35 min read · A multiple is a valuation with the components compressed: price over earnings contains
Valuation and Capital Allocation
- Valuing Banks, REITs and Cyclicals35 min read · The toolkit assumes a business whose debt is a financing choice and whose earnings
- Valuing Young and Unprofitable Companies35 min read · A young company cannot be valued on its current numbers, so the valuation has to be built
- Capital Allocation: Buybacks, Dividends, M&A30 min read · Capital allocation is the one management decision that compounds: every dollar not
- Factor Evidence: Value, Quality, Momentum, Size35 min read · A factor is a claim that a group of stocks earns more than a model says it should, and it
- Analyst Estimates, Targets and Revisions30 min read · A price target is an earnings estimate multiplied by a multiple, and both halves are
Cases and the Desk
- Case: Dot-Com Valuations, 200030 min read · The dot-com peak was not a failure of analysis but a set of assumptions that were
- Case: 2008 Bank Balance Sheets35 min read · A bank’s equity is a thin layer on a large portfolio of assets funded with borrowings
- Reverse DCF and Expectations Investing35 min read · A price is a forecast, and a discounted model can be run backwards to read it.
- Capstone Lab: The Initiation Report40 min read · Research is a chain of arithmetic with a stated set of conditions at the end, and the
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Learn content is for education only — not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk. Examples are simplified and historical patterns never guarantee future results.