Category Archives: Fundamental Analysis

Financial Analysis – A “Check-up” for a Business

Just like we all care about our personal health, managers and investors care about the health of their company. How can they perform a “check-up” on their business in order to determine its progress and financial health? Instead of weight or blood pressure, analysts use financial ratios. We’ll talk about three categories of ratios: profitability, liquidity, and solvency.

MACD

The Moving Average Convergence-Divergence (MACD) indicator is one of the easiest and most efficient momentum indicators you can get. 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 result is that the MACD gives the best of both worlds: trend following and momentum. Click on this post for more details!

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). Read this post for the equations of both types of free cash flows and an explanation of how they are used.

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. This article explains why Form-8K reports are important, and what material events are.

Discounted Cash Flow

Discounted Cash Flow (DCF) 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. Click on this post to read about the uses and roles of DCF, how DCF is performed, and its advantages and disadvantages.