I think it's about time I tried to analyse the basic fundamentals of a company that I might be interested to invest in. What has held me back is a lack of systematic approach to this task, as well as feeling a little overwhelmed by so many figures and financial measures to look at. Perhaps seasoned analysts on this board might suggest a step by step approach as to how I might proceed. Hopefully I will be able to carry out a top level company analyses with a little help and suggestions.
Hi turbo,
I don't know if this is of any help, but I recently wrote an article on understanding balance sheets, to be honest it is something of a stream of consciousness rather than a comprehensive review.
I am planning to follow it up with a few cases studies (probably as VLOGs) but have been somewhat delayed on that by some other things going on. I should be able to get on to it next week and hopefully by looking at real examples, it may make it a bit more (erm) real.
To get a fuller picture of the accounts you also of course need to look at the Income Statement (aka P&L) and the Cash-Flow statement). My personal preference is to look at these as a continuum rather than two separate sections. Personally I actually ascribe much more importance to these than to the Balance Sheet, so I perhaps I ought to be writing about those too! (On my to do list and I will hopefully get there in the end.)
Just to guide you to maybe getting more responses - you've categorised your post as "Technical Analysis" - this actual relates to using past movements in the share price to predict the future. Some people regard that as voodoo, so it might put them off. Probably better to use "Financial Ratio Analysis" - if you want to, you can change this by using the 'edit' link towards the top of your post.
