Fundamental

How to Find Wide Economic Moat Companies

An Economic Moat is a long-term competitive advantage that creates a market barrier to other firms and can enable a company to maintain very high profit levels. The term “economic moat” was coined by the great investor Warren Buffet who believes that investing in a company with a substantial economic moat is safer than [...]

Evaluating Company Management in Fundamental Analysis

When evaluating a stock, many investors will look at the strength and effectiveness of company management as part of the due diligence process. The corporate scandals of recent years have reminded all of us of the importance of having a high-quality management team in place. The role of the management team, as far [...]

Analyzing the Cash Flow Statement

The Cash Flow Statement (CFS) or “statement of cash flows” is a financial statement that records the cash and cash equivalents entering and leaving a company. The “cash inflow” is the money coming into the business, while the “cash outflow” is the money going out. Cash is the lifeblood of any business since, [...]

Measuring a Company’s Cash Conversion Cycle

The cash conversion cycle (CCC) is a measure of the time it takes a company to convert its resources to cash. The CCC is the total time it takes for the company to convert its resources into inventories, then into finished products for sale, then the conversion of those products into accounts receivable and then [...]

The Importance of Operating Cash Flow

Operating Cash Flow or “cash flow from operating activities” is the cash a company generates through the operations of its business. The operating cash flow is generally defined as revenues minus the costs associated with the company’s operations. Because operating cash flow adjusts for liabilities, depreciation, and receivables, it is viewed as a [...]

Finding Good Stocks to Buy- Five Things to Look For

Stock market investors are trying to find good stocks to buy before the other stock market investors find them.
Given the laws of supply and demand that apply to the stock market, which is a very efficient market,
you want to buy “undervalued” stocks.
Ideally, the demand for these stocks will increase after you have [...]

A Process to Conduct Fundamental Analysis

Fundamental analysis is a stock valuation process under which the investor examines company financials and operations. Under this process, the investor will pay particular attention to the company’s sales and, earnings (as well as growth potential), the company’s assets and liabilities, its management team, product line and competitors. Unlike technical investors, the fundamental investor [...]

Signs that a Company May Be
Headed for Financial Trouble

As we know, there are inherent risks in investing in the stock market. The risks associated with stock market investing exist due to the simple laws of supply and demand. If you purchase a stock whose perceived value then decreases due to investor concerns over the long-term viability of that company, that stock [...]

The Current Ratio in Fundamental Analysis

The Current Ratio is one of the standard measures of the financial health of a business. The measure can provide an indication of whether the business will be able to meet its short-term obligations by measuring the level of current assets to cover those liabilities. In other words the current ratio can tell an [...]

Financial Ratios and Fundamental Analysis

Financial ratio analysis is one of the most important aspects of the fundamental analysis process. Through ratio analysis, an investor can systematically sort through and make sense of the volumes of financial statement data offered by a company. By analyzing and monitoring a company’s financial ratios, an investor can gain insight into the financial [...]