by KenFaulkenberry | Oct 4, 2014 | Investment Analysis
Working capital is an important measure of a company’s operating liquidity. The working capital ratio (a.k.a current ratio) is an indicator of the ability of the company to meet its short term obligations.
Working capital calculations such as Net Current Asset Value (NCAV) and Net Net Working Capital (NNWC) provide valuable metrics with which to measure against price in order to identify bargain stocks.
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by KenFaulkenberry | Sep 27, 2014 | Investment Analysis
Enterprise value (EV) and Enterprise value ratios are part of the basic foundation of stock analysis for value investors.
The purpose of Enterprise Value (EV) is two fold; First, to calculate what it would cost to purchase the entire company or business. Secondly, to provide a capital neutral valuation with which to compare with other companies.
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by KenFaulkenberry | Jan 3, 2013 | Investment Analysis
Net Cash Flow is important because it tells an investor how much cash a company is generating. After a company creates a product or service and pays all of its bills, the cash flow earnings is the cash the business has available to make money for the shareholders.
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by KenFaulkenberry | Dec 27, 2012 | Investment Analysis
The purpose of the cash flow statement is to show where an entities cash is being generated (cash inflows), and where its cash is being spent (cash outflows), over a specific period of time (usually quarterly and annually). It is important for analyzing the liquidity and long term solvency of a company.
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by KenFaulkenberry | Dec 25, 2012 | Investment Analysis
The purpose of the income statement is to provide the financial earnings performance of the entity over a specific period of time. It is also referred to as a profit and loss statement or earnings statement.
The components of the income statement format allows for dissecting the revenues, expenses, operating income, and profits of an entity.
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