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Published byAlice Rich Modified over 9 years ago
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Overview What not to do Where to find the right information How to interpret the data
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What not to do: Historical Stock Prices Stock Charts Historical Trading Volume Price Multiples
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Financial Websites Yahoo! Finance Google Finance MSN Money MorningStar S&P NetAdvantage
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Yahoo vs. Google Key Statistics Financial Highlights Financials Income Statement Balance Sheet Cash Flow Financial Statements 5 most recent Quarters 4 most recent Years All Financial Data is from Reuters Reuters Recent News
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MSN Money MSN Key Ratio Reports MSN > MSN Money > Ticker Symbol > Print Report > Key Ratios
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MSN Money Reports Step #1 Step #2 Example Report
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Morningstar Snapshot Industry Peers Growth Profitability Financial Health Financial Statements 10 Year Statements Key Ratios Profitability Growth Rates Cash Flow Financial Health Efficiency Ratios
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S&P NetAdvantage Find in the Valley Library Online Databases
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Interpreting the Data
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Analyzing Financial Statements Arithmetic Mean vs. Geometric Mean Use Compound Annual Growth Rate (CAGR) Ways to Analyze Financial Statements Common Size Trend Year over Year CAGR
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4 Key Areas to Look at Profitability Gross Margin, Net Profit Margin Growth Sales, Net Income, Dividends Financial Health D/E Ratio, Current Ratio, Int. Coverage Return on Investments ROE, ROA, ROIC
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Ratios ROE Example: Apple has a ROE of 27.9% - Is that good or bad? Neither. All ratios are relatives. Correct Statement: “Apple has a ROE of 27.9% which is 8 percentage points less than the industry average.”
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Ratios Gross Margin Example: Apple has a Gross Margin of 34.1%- Is that good or bad? Neither. All ratios are relatives. Correct Statement: “Apple has a Gross Margin of 34.1% which is 306 bases points higher than the industry average.”
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Interpret the Data “Apple has a Gross Margin of 34.1% which is 306 bases points higher than the industry average.” “Apple has a ROE of 27.9% which is 8 percentage points less than the industry average.” Any financial data provided, should be accompanied by a statement that answers: What does this mean?
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