Fundamental Analysis FAQs

  1. What are some common traits of undervalued stocks?

  2. What are the best indicators for evaluating technology stocks?

  3. How does Warren Buffett choose the companies he buys?

  4. What does a high inventory turnover tell investors about a company?

  5. Why is it sometimes better to use an average inventory figure when calculating the inventory turnover ratio?

  6. How do you calculate working capital?

  7. How do changes in working capital affect a company's cash flow?

  8. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

  9. How do you calculate return on equity (ROE)?

  10. Why is the compound annual growth rate (CAGR) misleading when assessing long-term growth rates?

  11. What are the main differences between return on equity (ROE) and return on assets (ROA)?

  12. What are the main differences between compound annual growth rate (CAGR) and internal rate of return (IRR)?

  13. Are companies with a negative return on equity (ROE) always a bad investment?

  14. How do I calculate the inventory turnover ratio?

  15. Why is return on investment (ROI) a bad measure for calculating long-term investments?

  16. What factors go into calculating social return on investment (SROI)?

  17. How do I calculate the P/E ratio of a company?

  18. How can the price-to-earnings (P/E) ratio mislead investors?

  19. How can return on investment (ROI) calculations be manipulated?

  20. Is there value in comparing companies from different sectors by using the debt-to-equity ratio?

  21. What is the formula for calculating earnings per share (EPS)?

  22. What is the formula for calculating the current ratio?

  23. How do interest rates affect the weighted average cost of capital (WACC) calculation?

  24. What is considered a high debt-to-equity ratio and what does it say about the company?

  25. What are the best uses for trailing EPS, current EPS and forward EPS?

  26. How can the current ratio be misinterpreted by investors?

  27. What is the formula for calculating the debt-to-equity ratio?

  28. What's the difference between weighted average cost of capital (WACC) and internal rate of return (IRR)?

  29. What are the main differences between the current ratio and the quick ratio?

  30. Why is earnings per share (EPS) also known as “The Bottom Line”?

  31. How do I start using technical analysis?

  32. What is the difference between weighted average shares outstanding and basic weighted average shares?

  33. What is a cross hedge?

  34. What is the McGinley Dynamic?

  35. How do I value the shares that I own in a private company?

  36. Does the balance sheet always balance?

  37. What does it mean when "N/A" appears for a company's P/E ratio?

  38. What is the Coppock curve?

  39. What is the difference between return on equity and return on capital?

  40. What's the difference between old- and new-economy stocks?

  41. How do you determine a company's percentage of credit sales?

  42. Is technical analysis used only to analyze stocks?

  43. What is the difference between fast and slow stochastics in technical analysis?

  44. What is the best method of analysis for forex trading?

  45. Can a stock have a negative price-to-earnings (P/E) ratio?

  46. What is the weighted average of outstanding shares? How is it calculated?

  47. Can technical analysis be called a self-fulfilling prophecy?

  48. What's the difference between "top-down" and "bottom-up" investing?

  49. What is Fibonacci retracement, and where do the ratios that are used come from?

  50. Can a company declare a dividend that exceeds its earnings per share?

  51. What number of shares determines adequate liquidity for a stock?

  52. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always a better investment than a stock with a higher one?

  53. Which of the following terms are associated with the purchase/redemption of open-end investment company shares?

  54. What is the difference between fundamental and technical analysis?

  55. What technical tools can I use to measure momentum?

  56. Why are P/E ratios generally higher during times of low inflation?

  57. What is the difference between economic value added and market value added?

  58. Where can I find the P/E ratios for the Dow and S&P 500?

  59. I keep hearing about the 50-day, 100-day and 200-day moving averages. What do they mean, how do they differ from each other, and what causes them to act as support or resistance?

  60. What is a split-adjusted share price?

  61. When computing the PEG ratio for a stock, how is a company's earnings growth rate determined?

  62. What's the difference between absolute P/E ratio and relative P/E ratio?

  63. Where do I place my target when the price of a stock breaks out of a technical chart pattern?

  64. What does it mean to use technical divergence in trading?

  65. Is maximizing stock price the same thing as maximizing profit?

  66. Is it possible for a company to have a positive cash flow and a negative net income?

  67. What do the bracketed numbers following a technical indicator mean?

  68. How do I take qualitative factors into consideration when using fundamental analysis?

  69. Does a strong trend (ADX > = 40) cause an increase in volatility?

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