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How to analyze financial statements?

I have to analyze financial statements for a company, say Oracle, for the last 5 years including revenue, net profit, employee count and other significant details released in quarterly results? How do I do it?

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PM greenman,he does it for a modest fee.

No, I want to do it myself. If you or anyone can tell me how do I go about it?

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SamCryBaby wrote:

PM greenman,he does it for a modest fee.

+1

We’re gonna win so much, you may even get tired of winning. And you’ll say, 'Please, please. It’s too much winning. We can’t take it anymore. Mr. President, it’s too much.' And I’ll say, 'No, it isn’t!' We have to keep winning!

Yeolmae wrote:

No, I want to do it myself. If you or anyone can tell me how do I go about it?

Again, I would PM him and set up a video call.

Okay I’ll message him.

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That’s his bread and butter. Don’t be so mean! 

Tank.

@Yeolmae, I do this on a daily basis.

It depends on the industry, type of company, and your perspective. But generally, I look at three buckets: 1) Profit. 2) Liquidity (Cashflow) 3) Leverage. From a risk perspective, you are looking at whether the company is a going concern. From an investing perspective, you want to determine if the company is valued at the right price - this is much more intensive, requires different metrics than below and requires modeling.

From a risk perspective, generally:

1) Profit: revenue growth, profit margin, operating income.

2) Liquidity: current ratio, cash flow from operations

3) Leverage: Long-term debt/equity, interest-bearing debt/equity, interest coverage ratio. Note: an operating company should have lower D/E than an investing company. A manufacturing firm would perhaps have 50% assets funded by debt (D/E = 1), while a bank would normally have 80-90% debt to assets (D/E through the roof). Research the industry benchmarks.

SaaS companies and start ups use different metrics and fundamental analysis don’t really work. Check out things like Rule of 40, Efficiency ratio.

Hope this gives you a bit of a start. Remember - Cash is King.

https://www.sec.gov/Archives/edgar/data/1341439/000156459019023119/orcl-10k_20190531.htm

those are eery year you need. just click the links. ur welcome.

I love my cheese. I got to have my cheddar.

profitfromfolly wrote:

@Yeolmae, I do this on a daily basis.

It depends on the industry, type of company, and your perspective. But generally, I look at three buckets: 1) Profit. 2) Liquidity (Cashflow) 3) Leverage. From a risk perspective, you are looking at whether the company is a going concern. From an investing perspective, you want to determine if the company is valued at the right price - this is much more intensive, requires different metrics than below and requires modeling.

From a risk perspective, generally:

1) Profit: revenue growth, profit margin, operating income.

2) Liquidity: current ratio, cash flow from operations

3) Leverage: Long-term debt/equity, interest-bearing debt/equity, interest coverage ratio. Note: an operating company should have lower D/E than an investing company. A manufacturing firm would perhaps have 50% assets funded by debt (D/E = 1), while a bank would normally have 80-90% debt to assets (D/E through the roof). Research the industry benchmarks.

SaaS companies and start ups use different metrics and fundamental analysis don’t really work. Check out things like Rule of 40, Efficiency ratio.

Hope this gives you a bit of a start. Remember - Cash is King.

Thank you so much. Also, how do I incorporate employee count in this?

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Nerdyblop wrote:

https://www.sec.gov/Archives/edgar/data/1341439/000156459019023119/orcl-10k_20190531.htm

those are eery year you need. just click the links. ur welcome.

Thank you 

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Um, are you trying to figure out operating cost per employee? revenue per employee?

I don’t think I’ve ever considered employee count in any form of financial statement analysis. What is the question you are trying to answer?

Yeolmae wrote:

profitfromfolly wrote:

@Yeolmae, I do this on a daily basis.

It depends on the industry, type of company, and your perspective. But generally, I look at three buckets: 1) Profit. 2) Liquidity (Cashflow) 3) Leverage. From a risk perspective, you are looking at whether the company is a going concern. From an investing perspective, you want to determine if the company is valued at the right price - this is much more intensive, requires different metrics than below and requires modeling.

From a risk perspective, generally:

1) Profit: revenue growth, profit margin, operating income.

2) Liquidity: current ratio, cash flow from operations

3) Leverage: Long-term debt/equity, interest-bearing debt/equity, interest coverage ratio. Note: an operating company should have lower D/E than an investing company. A manufacturing firm would perhaps have 50% assets funded by debt (D/E = 1), while a bank would normally have 80-90% debt to assets (D/E through the roof). Research the industry benchmarks.

SaaS companies and start ups use different metrics and fundamental analysis don’t really work. Check out things like Rule of 40, Efficiency ratio.

Hope this gives you a bit of a start. Remember - Cash is King.

Thank you so much. Also, how do I incorporate employee count in this?

+ (FTE x % / 3$) if operating LLC (mod pi).

profitfromfolly wrote:

Um, are you trying to figure out operating cost per employee? revenue per employee?

I don’t think I’ve ever considered employee count in any form of financial statement analysis. What is the question you are trying to answer?

I copy pasted what was written where I saw it. That’s what confusing me too. 

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Mobius Strip wrote:

Yeolmae wrote:

profitfromfolly wrote:

@Yeolmae, I do this on a daily basis.

It depends on the industry, type of company, and your perspective. But generally, I look at three buckets: 1) Profit. 2) Liquidity (Cashflow) 3) Leverage. From a risk perspective, you are looking at whether the company is a going concern. From an investing perspective, you want to determine if the company is valued at the right price - this is much more intensive, requires different metrics than below and requires modeling.

From a risk perspective, generally:

1) Profit: revenue growth, profit margin, operating income.

2) Liquidity: current ratio, cash flow from operations

3) Leverage: Long-term debt/equity, interest-bearing debt/equity, interest coverage ratio. Note: an operating company should have lower D/E than an investing company. A manufacturing firm would perhaps have 50% assets funded by debt (D/E = 1), while a bank would normally have 80-90% debt to assets (D/E through the roof). Research the industry benchmarks.

SaaS companies and start ups use different metrics and fundamental analysis don’t really work. Check out things like Rule of 40, Efficiency ratio.

Hope this gives you a bit of a start. Remember - Cash is King.

Thank you so much. Also, how do I incorporate employee count in this?

+ (FTE x % / 3$) if operating LLC (mod pi).

Oh dear Lord

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I tried to attempt like this. Please give me your suggestions.

https://drive.google.com/file/d/1soRq0oBp4IzFZK9rp8eA9ZHe98tE-s8B/view?u...

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