All About Fundamental Analysis of Stocks

From filings to valuation

This overview sets out how to study a stock by reading the company's own documents. It covers the annual report, the profit and loss statement, the balance sheet and the cash flow statement, then the financial ratios that connect them.

Where valuation fits

DCF valuation and the wider equity research methods come last, after the statements have been understood. That order matters: a valuation is only as sound as the figures and assumptions beneath it.

A practical sequence

• Start with the annual report before any valuation model.
• Work through one ratio at a time against the same company.
• Keep a note of which assumptions drive your final number.