Category Archives: Fundamental Analysis

Balance Sheet

What is a Balance Sheet? The Balance Sheet (or Statement of Financial Position) is one of the four financial statements required by the SEC based on the U.S. GAAP (Generally Accepted Accounting Principles). According to the SEC, the Statement of Financial Position presents “detailed information about a company’s assets, liabilities and shareholders’ equity.” In other Read More…

Income Statement

Definition: The Income Statement is one of the financial statements that all publicly traded companies share with their investors. The income statement shows the company’s sales, expenses, and net profit (or loss) over a period of time–usually 3 months, year-to-date, and twelve months. The income statement also comes with a lot of notes and discussions Read More…

Asset Allocation

Definition “Asset Allocation” is how you have divided up your investments across different assets. You can have all your assets in one place, or you can use diversification to spread them around to reduce risk. Details Whenever you pick stocks, open a bank account, get paid, buy something, or do anything with any resources, you Read More…

MACD

The Moving Average Convergence-Divergence (MACD) indicator is one of the easiest and most efficient momentum indicators you can get. It was developed by Gerald Appel in the late seventies. The MACD moves two trend following indicators and moving averages into a momentum oscillator by subtracting the longer moving average from the shorter moving average. The Read More…

Black-Scholes

Introduction The Black-Scholes formula is the most popular ways to calculate the true price of an option. It is easy to calculate the intrinsic value, but the extrinsic value can be very tricky to calculate. Black Scholes is used for calculating two types of options. Options on stocks Stock Options. Fisher Black, Robert Merton and Read More…

Free Cash Flow

Free Cash flow is the cash available to all the capital providers of a company. There are two types of free cash flows: 1) Cash flow available to pay out to all capital providers and 2) Free Cash Flow to Equity (FCFE).

Form-8K

The Form-8K is a SEC-mandated report filed by public companies to report unexpected events or transactions that are material in nature, and thus have an impact on the share prices of the company.

Discounted Cash Flow

Discounted Cash Flow is a valuation technique or model that discounts the future cash flows of a business, entity, or asset for the purposes of determining its value. One aspect of investment decision-making entails discovering the fair value of investments.