“Book value is the amount you paid for an asset, minus its depreciation. “
Equity or book value represents the shareholder’s interest in a company and represents the value of its assets that are not financed by debt. Book value is nothing more than equity per share.
Equity = Total assets – total liabilities Continue reading “Shareholders’ equity: What does it mean and why is it so important?”
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Have you ever wondered how much more you could get done and how much time you would be able to free up if you could be a little bit more productive?
An increase in productivity could mean that you are 100% dedicated to a task without doing unnecessary things or getting distracted.
By realizing you are not always as productive as you would like to be and trying to improve, you’re already on the right track.
Here are 5 ways to boost your productivity.
“Nothing makes a person more productive than the last minute.”
1. Set short achievable deadlines
Continue reading “5 effective ways to boost your productivity”
What is a quarterly report? (10Q)
The quarterly report or 10Q shows a company’s earnings, cash flow and income (or loss) for a specific quarter. In one business year, a company states four quarterly reports and one annual report (10k).
The main parts of a Quarterly report are:
Continue reading “Quarterly reports: how to read”
The cash flow statement shows all the cash inflows and outflows occurred during the reporting period.
Cash flow analysis is a critical part of any investment decision as it is influenced less by accounting practices.
On the income statement, a transaction is recognized when the earnings process is completed. This does not necessarily coincide with the time that cash is exchanged.
Continue reading “The cash flow statement: how to read”
The income statement shows how much a company earned or lost during the year (or quarter).
An income statement matches the revenues earned from selling goods and services, against all costs and expenses incurred in the operation of the company. The difference is what we call net income (or loss).
On top of the Income statement, we find the revenue (or net sales) which is called “the top line”. From the top line, all costs and expenses are deducted until we arrive at the net income, also called “the bottom line”.
Continue reading “The income statement: how to read”
“The balance sheet is a snapshot of what a given company owns and owes at the time of reporting.”
The balance sheet is divided into two main halves: “assets” and “liabilities and shareholders’ equity”.
The first half will tell us what the company owns and the second half will show us what the company owes to creditors and shareholders. The two halves should always offset each other as every dollar in assets has been financed either by shareholders’ equity or by creditors (liabilities).
Continue reading “The balance sheet: How to read”
Undervalued stocks and how to find them
Investors look for undervalued stocks in order to make a higher return and reduce the risk of losing money on their investments.
What is an undervalued stock?
A stock is considered undervalued when its market price is below its intrinsic value. The intrinsic value of a stock is considered the real value of the company. Buying an undervalued stock can be compared like buying five-dollar bills with one-dollar bills.
Continue reading “How to find undervalued stocks”