I. Statement of cash flow
The cash flow statement of cash flow from operating activities is the real touchstone for a company to create value. There is no need to carefully check every item in the cash flow statement every time, because these items are perfectly included under the "net cash generated from operating activities". The change of working capital is often the biggest reason for the difference between net profit and cash flow from operating activities, which needs to be analyzed one by one.
1. Depreciation and amortization
This is not a cash expenditure. Need to add back the net profit.
2. Changes in working capital-both credit sales and borrowing will affect working capital, because the increase in accounts receivable means a decrease in cash flow; Cash flow increases with the increase of accounts payable; With the increase of inventory, cash flow decreases.
Cash flow from investment activities
Cash flow generated by investment activities-including money spent on long-term investment entities (such as state-owned assets) and long-term investments.
1. Investment income-the money earned or lost by the company in its investment.
2. Issue/buy stocks?
Cash flow from financing activities
1. Generate benefits
2. Issuing new shares enriches the company's cash while diluting the existing stock price.
3. Issue and repay debts-whether there is a loan or whether the previous loan has been repaid. ?
Second, the balance sheet?
Balanced type: assets and liabilities = owner's equity
Property; property; assets
floating assets
1. Accounts receivable: the company has not received the cash, but it will receive the payment soon without accident.
Accounts receivable are growing faster than sales revenue, which is a sign that problems are prone to occur, because no one can guarantee to recover all the lent cash. Comparing the growth rate of accounts receivable with the growth rate of sales revenue is a good way to judge the company's ability to recover accounts receivable.
2. Bad debt provision
In response to the company's estimate of how much money might be owed, the money was all gone.
3. Inventory: including raw materials, semi-finished products and finished products that have not yet been sold.
Inventory is very important for observing manufacturing and retail. Inventory takes up funds, cash becomes inventory, and nothing can be done in the warehouse. The turnover rate of inventory has a great influence on the rate of return.
Inventory turnover rate = cost of sales/inventory
For example, it is not a good phenomenon that high-tech products depreciate quickly and turn around slowly.
non-liquid asset
1. Fixed assets
The ratio of fixed assets to total assets reflects how much fixed assets occupy the company's funds.
2. investment? Mainly refers to long-term investment.
You need to carefully check and ponder the texture of the investment target to see its true value.
3. Intangible assets
Goodwill is the most common form. Goodwill: the difference between the price paid by the acquiring company and the actual assets of the target company. The goodwill in the report is generally much higher than the real value of the target company, so this account should be treated with caution, and it is best to leave this column blank.
be in debt
Current liabilities?
1. Accounts payable? It is the money borrowed by the company, and it will be paid back within one year.
It means holding cash for a longer time, which is good for improving the company's cash flow.
2. Short-term borrowing
This is extremely important for companies in financial trouble, because all short-term loans must be repaid as soon as possible.
non-current liability
The most important thing is long-term liabilities.
Owner's equity
The only thing worth paying attention to is undistributed profits.
Undistributed profit-is the basic record of the company's profit minus pink and stock repurchase after a certain period of capital existence. Undistributed profit is a record of a company's long-term profitability. ?
Third, the income statement?
1. Sales revenue-how much was sold.
2. Cost of sales-refers to expenses related to directly generated income. ?
3. Gross profit-how high the price of the product can be marked and how much money can be earned.
4. Operating expenses-sales expenses+management expenses-whether management is economical or not, the lower the cost, the stricter the cost saving. (Buffett's operating expenses/gross profit < 30% is excellent)
5. Depreciation and amortization
This is a sum of money that is not included in the net profit, but has no actual expenditure.
6. Non-operating profit and loss
It better be blank. Companies are used to adding the cost of real business activities to this project. The relevant reasons must be found in the comments. Continued non-operating expenses are a sign of management's lack of confidence.
7. Operating profit-sales revenue-sales cost-operating expenses
Operating profit is a figure close to the truth, because it does not include almost all one-off subjects.
Operating profit/sales revenue = operating gross profit margin, which can be compared across industries.
8. Interest income/expense-the interest that the company receives from the bonds it issues and the goods it pays for holding the bonds.
9. Tax-usually the expenses listed before the net profit.
Find out whether the current rate is permanent or temporary.
If the tax rate fluctuates from year to year, it means that tax evasion may generate more income than the sales of goods or services.
10. Net profit
Net profit must be combined with cash flow statement, because it is easily distorted by one-time expenses or one-time investment income.
1 1. number of shares-the number of shares issued during the reporting period, including the number of benchmark shares and the number of diluted shares.
The number of diluted shares includes potential securities that can be converted into stocks, such as stock options and convertible bonds. Investing in this kind of stockbroker means a potential shrinkage.
12 earnings per share = net profit/number of shares
If you don't look at the cash flow statement and integrate many other factors, it is meaningless to look at this figure alone.