Financial Statements Articles
Economic Moats: The Engine Behind Long-Term Earnings Power
June 2026 by Brian Haughey
Sustainable value creation requires a competitive advantage that has both magnitude and duration.
June 2026 by Brian Haughey
Sustainable value creation requires a competitive advantage that has both magnitude and duration.
Cash Is King and Free Cash Flow Wears the Crown
March 2026 by Brian Haughey
Free cash flow is not just an accounting exercise but is central to valuation.
March 2026 by Brian Haughey
Free cash flow is not just an accounting exercise but is central to valuation.
How Financial Statements Drive Stock Valuation Ratios
September 2025 by Charles Rotblut
Understanding how financial statements influence valuation measures helps you spot both positive and negative changes.
September 2025 by Charles Rotblut
Understanding how financial statements influence valuation measures helps you spot both positive and negative changes.
How to Analyze Corporate Earnings in Five Steps
July 2025 by Charles Rotblut
Earnings reports provide a snapshot of business performance, but they are most valuable when viewed as part of a longer-term trend.
July 2025 by Charles Rotblut
Earnings reports provide a snapshot of business performance, but they are most valuable when viewed as part of a longer-term trend.
16 Red Flags to Watch for in a Company’s Financial Statements
May 2025 by Charles Rotblut
Use our handy financial health checklist to spot potential problems in a stock before they cause you to incur a large loss.
May 2025 by Charles Rotblut
Use our handy financial health checklist to spot potential problems in a stock before they cause you to incur a large loss.
18 Financial Ratios That Shed Light on a Company’s Strengths and Weaknesses
January 2025 by Charles Rotblut
Financial ratios provide a powerful framework for assessing a company’s performance, efficiency and financial health across multiple dimensions and over time.
January 2025 by Charles Rotblut
Financial ratios provide a powerful framework for assessing a company’s performance, efficiency and financial health across multiple dimensions and over time.
How Financial Statement Data Can Differ Depending on the Provider
November 2024 by Wayne A. Thorp
Switching from as-reported to standardized data can significantly enhance the quality of stock analysis; however, using standardized data has potential limitations.
November 2024 by Wayne A. Thorp
Switching from as-reported to standardized data can significantly enhance the quality of stock analysis; however, using standardized data has potential limitations.
Money in, Money out: What the Cash Flow Statement Reveals
September 2024 by Charles Rotblut
How the cash flow statement tells you whether a company is realizing cash (copacetic) or burning through it (unsustainable).
September 2024 by Charles Rotblut
How the cash flow statement tells you whether a company is realizing cash (copacetic) or burning through it (unsustainable).
Balance Sheet Basics: Demystifying What a Company Owns & Owes
July 2024 by Jack Gilleland
Studying assets, liabilities and equity can give individual investors an advantage in judging whether a company might be a strong or weak portfolio addition.
July 2024 by Jack Gilleland
Studying assets, liabilities and equity can give individual investors an advantage in judging whether a company might be a strong or weak portfolio addition.
Getting to the Bottom Line: How to Read the Income Statement
May 2024 by Jack Gilleland
While it reports on profitability over a period of time, a firm’s income statement also offers valuable insights on internal operations.
May 2024 by Jack Gilleland
While it reports on profitability over a period of time, a firm’s income statement also offers valuable insights on internal operations.
Beyond the Numbers: Getting Started With Financial Statements
March 2024 by Jack Gilleland
Setting the stage for our new AAII Journal series by introducing basic concepts for mastering company analysis.
March 2024 by Jack Gilleland
Setting the stage for our new AAII Journal series by introducing basic concepts for mastering company analysis.
Times Interest Earned Ratio: Measuring a Firm’s Ability to Meet Its Obligations
August 2020 by Derek J. Hageman
One of the lesser-known measures that helps determine the financial strength of a company is the interest coverage ratio.
August 2020 by Derek J. Hageman
One of the lesser-known measures that helps determine the financial strength of a company is the interest coverage ratio.
Using Accruals to Judge How Persistent Earnings Will Be
June 2017 by Charles Rotblut
Accruals can be described as forecasts of future economic benefits; if they are too optimistic, future earnings will be reduced.
June 2017 by Charles Rotblut
Accruals can be described as forecasts of future economic benefits; if they are too optimistic, future earnings will be reduced.
Using Book Value to Judge a Stock's Worth
June 2015 by Charles Rotblut
The price-to-book-value ratio is a popular valuation measure among value investors, though most combine it with additional indicators.
June 2015 by Charles Rotblut
The price-to-book-value ratio is a popular valuation measure among value investors, though most combine it with additional indicators.
Valuing a Company Based on Its Revenues
October 2014 by Charles Rotblut
The price-to-sales ratio is considered to be one of the “cleanest” valuation multiples; it is also more tied to profit margin than you may realize.
October 2014 by Charles Rotblut
The price-to-sales ratio is considered to be one of the “cleanest” valuation multiples; it is also more tied to profit margin than you may realize.
Valuation Ratios: The PEG Ratio
June 2014 by Joe Lan
The PEG ratio factors a company’s growth into its valuation, allowing investors to compare companies with different rates of growth.
June 2014 by Joe Lan
The PEG ratio factors a company’s growth into its valuation, allowing investors to compare companies with different rates of growth.
Calculating Intrinsic Value With the Dividend Growth Model
March 2014 by Joe Lan
An estimate of a dividend-paying stock’s fair value can be calculated using accessible data and assumptions with this model.
March 2014 by Joe Lan
An estimate of a dividend-paying stock’s fair value can be calculated using accessible data and assumptions with this model.
Introduction to Stock Valuation: The Price-Earnings Ratio
September 2013 by Joe Lan
A close look at the most widely used valuation measure, and an explanation of how relative price-earnings ratios can provide more insight as to whether a stock is mispriced.
September 2013 by Joe Lan
A close look at the most widely used valuation measure, and an explanation of how relative price-earnings ratios can provide more insight as to whether a stock is mispriced.
Taking a Qualitative Look at a Prospective Stock's Figures
May 2013 by Joe Lan
A qualitative assessment of financial data reveals more about a company than what can be gleaned from the financial statements alone.
May 2013 by Joe Lan
A qualitative assessment of financial data reveals more about a company than what can be gleaned from the financial statements alone.
Analyzing Growth Rates
March 2013 by Joe Lan
Growth can bring more money into a company and drive the stock price higher. Find out how to calculate and analyze growth rates.
March 2013 by Joe Lan
Growth can bring more money into a company and drive the stock price higher. Find out how to calculate and analyze growth rates.
Breaking Down ROE Using the DuPont Formula
December 2012 by Joe Lan
The DuPont formula identifies the factors that determine how effectively management is generating profits for shareholders.
December 2012 by Joe Lan
The DuPont formula identifies the factors that determine how effectively management is generating profits for shareholders.
16 Financial Ratios for Analyzing a Company’s Strengths and Weaknesses
September 2012 by Joe Lan
These 16 ratios enable investors to compare the fiscal strength, profitability and efficiency of two or more companies.
September 2012 by Joe Lan
These 16 ratios enable investors to compare the fiscal strength, profitability and efficiency of two or more companies.
The Cash Flow Statement: Tracing the Sources and Uses of Cash
July 2012 by Joe Lan
We discuss why the cash flow statement is the connecting link between the income statement and balance sheet as well as how to evaluate a company based on this report.
July 2012 by Joe Lan
We discuss why the cash flow statement is the connecting link between the income statement and balance sheet as well as how to evaluate a company based on this report.
The Balance Sheet: Assets, Debts and Equity
May 2012 by Joe Lan
In this article, we showcase an example of a balance sheet and give you a clear understanding of the assets, liabilities and equity sections of this company report.
May 2012 by Joe Lan
In this article, we showcase an example of a balance sheet and give you a clear understanding of the assets, liabilities and equity sections of this company report.
The Income Statement: From Net Revenue to Net Income
March 2012 by Joe Lan
Discover how you can use the income statement, along with other financial reports, to evaluate a company’s net revenue, income and more before investing.
March 2012 by Joe Lan
Discover how you can use the income statement, along with other financial reports, to evaluate a company’s net revenue, income and more before investing.
Introduction to Financial Statement Analysis
January 2012 by Joe Lan
The first article in this popular series explains what the income statement, balance sheet and cash flow statement are and how they are interconnected.
January 2012 by Joe Lan
The first article in this popular series explains what the income statement, balance sheet and cash flow statement are and how they are interconnected.
Using SEC Filings to Identify Risk Factors
June 2011 by Michelle Leder
Potential problems in companies can be identified before they wreck havoc with your portfolio by looking at SEC filings.
June 2011 by Michelle Leder
Potential problems in companies can be identified before they wreck havoc with your portfolio by looking at SEC filings.
The Big Pension Plan Hole and What It Means to Investors
July 2003 by Edwin D. Everett
Stock market declines and low interest rates have taken their toll on corporate pension plans. What companies do about it could affect the market.
July 2003 by Edwin D. Everett
Stock market declines and low interest rates have taken their toll on corporate pension plans. What companies do about it could affect the market.
Fundamental Analysis: A Closer Look at Gross Margins
July 2000 by Marcus W Robins
Amid all the detailed numbers on the income statement, gross margin is one figure that may be worth obsessing over, because it sits at the middle of several of the key accounting formulas that determine business success.
July 2000 by Marcus W Robins
Amid all the detailed numbers on the income statement, gross margin is one figure that may be worth obsessing over, because it sits at the middle of several of the key accounting formulas that determine business success.