Fundamental Analysis Articles
Deep dives into financial statements, valuation metrics, and business quality assessment.
Weighted Average Cost of Capital (WACC) Explained: The Hurdle Rate Every Investor Should Know
WACC is the blended rate a company must pay to finance its operations — and the single number that ties together the entire fundamental-analysis reading series. Learn the WACC formula, the cost of equity via CAPM, the cost of debt and the tax shield, why market values beat book values, how WACC sets the threshold for value creation against ROIC, and the five pitfalls that trip up most first-time WACC analysis.
Return on Invested Capital (ROIC) Explained: The Best Scoreboard for Capital Efficiency
ROIC measures how many cents of operating profit a company earns on every dollar of capital it has raised — from both debt holders and shareholders. Learn the formula, the NOPAT and invested-capital definitions, the ROIC vs WACC test, the DuPont decomposition, and why ROIC is often a more honest read of management skill than ROE or net income growth.
Discounted Cash Flow (DCF) Valuation: How to Estimate What a Stock Is Really Worth
A discounted cash flow model is the most disciplined way to estimate what a company is worth. Learn the formula, the five inputs that drive it, how to estimate WACC and terminal value, how to bridge from enterprise value to per-share intrinsic value, the five most common mistakes, and when DCF is the wrong tool entirely.
Working Capital, Current Ratio, and Quick Ratio: How to Read a Company's Short-Term Health
A company can be profitable and still run out of cash. Learn how working capital, the current ratio, the quick ratio, the cash ratio, and the cash conversion cycle reveal a company's short-term liquidity — and why a deteriorating trend in any of them is often the first warning sign of financial trouble.
Stock-Based Compensation, Dilution, and Share Count: How Employee Pay Eats (or Doesn't Eat) Your Investment
Dilution is what happens when a company issues new shares. Learn where the new shares come from, how to read SBC in the income statement, why the gap between basic and diluted share count matters, and how buybacks and grants interact over time.
Return on Equity (ROE) Explained: Measuring How Well a Company Uses Your Money
Return on equity shows how much profit a company earns on every dollar of shareholder capital. Learn the formula, the DuPont breakdown, the leverage trap, and how ROE compares to ROA and ROIC.
Understanding the Income Statement: Revenue, Expenses, and Profitability Metrics
Learn to read the income statement from top to bottom — revenue, COGS, gross profit, operating income, EBITDA, and net income — and spot the red flags that matter most to investors.
Reading Earnings Reports: A Practical Guide for Investors
Learn how to read quarterly earnings reports, understand key metrics like EPS and revenue, interpret forward guidance, and avoid common beginner mistakes.
How to Read an Earnings Report: Revenue, EPS, Margins, and Guidance
Decode quarterly earnings reports with confidence—learn what revenue beats, EPS, margins, and guidance really mean for a stock.