THEME 04 · CORE

Reading a company: fundamentals and valuation

The numbers behind the dividend. Enough accounting to read a company's results without pretending to be an analyst. — 10 lessons · 34 terms · 2 playbooks

The lessons

  1. 4.1

    The three statements, in one lesson

    What each one is for, in the order you'd actually read them.

  2. 4.2

    Earnings per share, and what dilutes it

    Profit divided by shares — and why the second number keeps changing.

  3. 4.3

    What a P/E ratio does and doesn't tell you

    A price relative to profit. Useful between similar companies, misleading between different ones.

  4. 4.4

    Revenue, margin, and where profit comes from

    The gap between selling a lot and making money.

  5. 4.5

    Free cash flow, the honest number

    What's left after running the business and maintaining it. This is what pays you.

  6. 4.6

    Debt: gearing, interest cover, covenants

    How much of the business belongs to lenders before it belongs to you.

  7. 4.7

    Buybacks: the other way of returning cash

    Fewer shares, same profit. Why some companies prefer it to a dividend.

  8. 4.8

    Reading a results announcement without reading all of it

    Where the actual news sits in twelve pages of RNS.

  9. 4.9

    What a moat is, and how people argue about it

    The reason a company can keep earning above-average returns — and why it's an argument, not a metric.

  10. 4.10

    Sectors, and why they behave differently

    Cyclical, defensive, and where dividend investors tend to end up.

Educational content only. It is not personal financial advice.