The three financial statements are the foundation of every investment decision. Learn to read them fluently and you'll see what most retail traders miss.
Every publicly traded company tells its financial story through three interconnected statements. The income statement shows profitability, the balance sheet shows financial health, and the cash flow statement shows where money actually goes. Module 3 teaches you to read all three — and to combine them into ratios that reveal whether a stock is cheap, expensive, or fairly valued.
Revenue, COGS, margins, operating income, net income, and EPS. Revenue recognition rules (ASC 606), GAAP vs. non-GAAP earnings, the share buyback effect, and red flags that signal manipulation.
Assets, liabilities, and shareholders' equity. Current ratio, quick ratio, working capital, tangible book value, goodwill risks, and debt structure — the snapshot that reveals financial health.
Operating, investing, and financing cash flows. Free cash flow, FCF per share, capital allocation analysis, the three-statement reconciliation, and why cash is the ultimate truth-teller.
P/E, PEG, P/B, P/S, EV/EBITDA, ROE, ROA, debt/equity, FCF yield, and more. When each ratio works, when it fails, and a hands-on exercise to build your own ratio dashboard on a real company.