Fundamental Analysis FAQs

  1. What is a good interest coverage ratio?

  2. What is a bad interest coverage ratio?

  3. What is liquidity risk?

  4. What is a good gearing ratio?

  5. What is considered to be a bad gearing ratio?

  6. What does the gearing ratio say about risk?

  7. What is the difference between a capital gearing ratio and a net gearing ratio?

  8. What is the difference between the gearing ratio and the debt-to-equity ratio?

  9. What is the difference between interest coverage ratio and DSCR?

  10. What is the difference between interest coverage ratio and TIE?

  11. What is accrual accounting used for in finance?

  12. What is the difference between accrual accounting and cash accounting?

  13. When are expenses and revenues counted in accrual accounting?

  14. When does a business report gross margins?

  15. What is the difference between a P&L statement and a balance sheet?

  16. What are essential steps to financial due diligence?

  17. How do I build a trading strategy after spotting a breakaway gap pattern?

  18. How does Facebook (FB) make money?

  19. How does Twitter (TWTR) make money?

  20. What's the difference between capital expenditures (CAPEX) and operational expenditures ...

  21. How do traders interpret a Downside Tusuki Gap pattern?

  22. What's the difference between capital expenditures (CAPEX) and net working capital?

  23. Why is it important to understand the Circular Flow Of Income when making investment ...

  24. What are the most common leverage ratios for evaluating a company?

  25. What's more important, cash flow or profits?

  26. Which leverage ratios are most useful for analyzing manufacturing companies?

  27. What are some examples of how cash flows can be manipulated or distorted?

  28. What is the difference between cash flow and free cash flow?

  29. What's the difference between levered and unlevered free cash flow?

  30. Is free cash flow the same as net free cash flow?

  31. How is it possible for a company to have a negative enterprise value?

  32. What does a mutual fund's beta coefficient measure?

  33. What is the difference between enterprise value and equity value?

  34. What's the difference between enterprise value and market capitalization?

  35. What's the difference between free cash flow and operating cash flow?

  36. What metrics should I evaluate when looking for high-yielding dividend stocks?

  37. What's the difference between retained earnings and revenue?

  38. Is the Social Security trust fund solvent?

  39. How much should my profit margins be?

  40. What are some examples of factors that will affect my profit margin?

  41. What's the difference between profit margin and markup?

  42. What's the difference between profit margin and operating margin?

  43. How do I calculate earnings per share with simple capital and complex capital structure?

  44. What are the differences between dilutive securities and antidilutive securities?

  45. Does gross profit account for sales returns?

  46. What are the differences between operating profit and operating income?

  47. How is impairment loss calculated?

  48. What are the differences between operating expenses and overhead expenses?

  49. What does the current cost of living compare to 20 years ago?

  50. How is revenue related to retained earnings?

  51. What is the difference between an income statement and a balance sheet?

  52. What does an income statement look like?

  53. What are the differences between operating expenses and cost of goods sold (COGS)?

  54. What are the differences between gross profit and gross margin?

  55. Does gross profit include tax?

  56. Does gross profit include depreciation or amortization?

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

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

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

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

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

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

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

  64. What are some common traits of undervalued stocks?

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

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

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

  68. Why is it sometimes better to use an average inventory figure when calculating the ...

  69. How do you calculate working capital?

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

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

  72. What are the main differences between return on equity (ROE) and return on assets ...

  73. What are the main differences between compound annual growth rate (CAGR) and internal ...

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

  75. How do I calculate the inventory turnover ratio?

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

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

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

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

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

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

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

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

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

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

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

  87. What's the difference between weighted average cost of capital (WACC) and internal ...

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

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

  90. How do I start using technical analysis?

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

  92. What is a cross hedge?

  93. What is the McGinley Dynamic?

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

  95. Does the balance sheet always balance?

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

  97. What is the Coppock curve?

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

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

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

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