Analysis of Financial Statements Worksheet

Use the worksheet below to determine if a company has the coveted Durable Competitive Advantage. Calculate the ratios and equations using the values found in the company's financial statements. Read everything and anything about the company. Understand its business and how it makes money. We also prefer to invest in companies that pay dividends.



The Rundown:



Basic Information
Company Name Ticker Symbol
Date of Analysis Value of Investment


Weight of the Investment
Large Mid-Size Small


Understand the Business

Is the company very well known or has a recognizable brand name?



What does the company do and how does it make money?



Does the company pay dividends?




Determine if the Company has Good Management

Who is the CEO and Chairman of the company? Who are its Board Members?



Is the CEO, Chairman, and Board Members smart? Are they dumb? Are they innovative and productive? Or are they old and obsolete?



Google or find YouTube videos of the CEO, Chairman, and Board Members. Do you like their face? Is your gut feeling about them good? Or bad?



Does the company's management look out for the interest of shareholders? Or are they greedy? And they are in it for themselves?




Checkmark the Durable Competitive Advantage Characteristics of the Business

Durable Competitive Advantage Characteristics of the Business
Sell a product or service that is a basic necessity Is in an industry with very little competition
Sell a unique product that doesn't change much Provides a unique service that's difficult to replicate
Is the low-cost buyer and seller of products the public constantly needs Spends very little or none at all on research and development


Look for a Durable Competitive Advantage Using the 10 Year Summary

10 Year Summary
Year Revenue Net Income Earnings Per Share Retained Earnings


Strength of Durable Competitive Advantage

If the company's 10 Year Earnings Per Share is rising, it means the company may have a Durable Competitive Advantage. In that case, we should analyze the company's Financial Statements to find out the strength of the company's durability. If the company's earnings is erratic; going through periods of losses or no profitability, then the company most likely does not have what we are looking for. In that case, stop here, there is no point in proceeding.


Value and Growth Analysis

Highlights of my Analysis:




Value and Growth Analysis
Price to Earnings Ratio Price to Book Ratio
10 Year Growth Rate of Earnings/Share   10 Year Growth Rate of Dividends  
Equity Bond Theory Municipal Bond Rate
Current Stock Price Relative Value
Projected 10 Year Stock Price Projected 10 Year Annual Return
Projected 10 Year Gain Projected 10 Year Fold Increase


Analysis of Income Statement

Highlights of my Analysis:




Durable Competitive Advantage Thresholds (Income Statement)
Gross Profit Margin
Selling/General/Admin to Gross Profit
Research and Development to Gross Profit
Business Cost to Gross Profit
Depreciation/Amortization to Gross Profit
Interest Expense to Operating Income
Operating Income x Tax Rate
Income Taxes Paid
Operating Income x Tax Rate = Income Taxes Paid?
Net Profit Margin


Analysis of Balance Sheet

Highlights of my Analysis:




Economic Collapse Thresholds (Balance Sheet)
(Net Income + Cash)/(ST & LT Debt Due)
(Net Income + Cash + Retained Earnings)/(ST & LT Due)
(Net Income + Cash + Retained Earnings)/(Current Liabilities)
Short Term Debt to Long Term Debt
Long Term Debt to Net Income
(Total Debt + Capital Expenditures)/Net Income
Adjusted Current Ratio


Business Efficiency Thresholds (Balance Sheet)
(Property/Plant/Equipment)/Net Income
Return on Property/Plant/Equipment
Return on Equity
True Return on Equity
Return on Assets
Total Equity > 0?
If (Total Equity < 0), is Net Income Increasing?


Durable Competitive Advantage Thresholds (Balance Sheet)
Total Receivables/Revenue < Competitors?
Total Inventory is Increasing?
Goodwill is Increasing? (Google what the company's acquisitions are)
Intangibles + Estimated Value of Brand Name
Long Term Investments (Google what the company's long term investments are)
Total Assets, is it a Huge Number?
Adjusted Debt to Equity
Preferred Stock: (Redeemable + Non Redeemable) = 0?
Retained Earnings is Increasing?
|Treasury Stock| is Increasing?


Price to Book Valuations (Balance Sheet)
Price to Book Value
Price to True Book Value


Analysis of Cash Flow Statement

Highlights of my Analysis:




Durable Competitive Advantage Thresholds (Cash Flow Statement)
Capital Expenditure/Net Income < 50 Percent?
Issuance (Retirement of Stock) < 0?
Issuance (Retirement of Debt) < 0?


My Financial Analysis of Stocks

  • The Market has Bottomed. It was on June 17, 2022 @Dow 29,653 It's time to buyBuy when we see redDon't buy when we see greenCover your PutsCover your ShortsBuy when there's bloodon "The ...
    Posted Jul 27, 2022, 10:46 PM by Intelligent Investor
  • We are still Accumulating our Favorite Value Stock Paramount Global (PARA) For the past several months we are still accumulating shares in Paramount Global (PARA) formerly known as ViacomCBS. And we are glad that our research has been validated by Berkshire ...
    Posted May 23, 2022, 8:29 AM by Intelligent Investor
  • Archive: My Stock Holdings 2021 View My Analysis: My Stock Holdings 2021
    Posted May 4, 2022, 1:53 PM by Intelligent Investor
  • Archive: My Stock Research 2021 View My Analysis: My Stock Research 2021
    Posted Apr 30, 2022, 8:40 PM by Intelligent Investor
  • We Think the Bottom for this Mild Correction may have Happened this Past Thursday on February 24th We do not see a recession in the near horizon. The U.S. economy is still growing. The Federal Reserve is still accommodative. The only thing we see is people ...
    Posted Mar 2, 2022, 3:08 PM by Intelligent Investor
  • Our Plan is to Buy the Dips. Buy Whenever We See Red. We believe the geopolitical issue occurring in Ukraine will be short-lived. We also believe that amidst a high-inflationary environment, many U.S. Equities will prevail. We plan to ...
    Posted Feb 26, 2022, 11:04 PM by Intelligent Investor
  • Swapped Disney (DIS) for more Paramount Global (PARA) A couple of months ago, we sold most of our shares in Disney (DIS) in exchange for Paramount Global (PARA), formerly known as ViacomCBS (VIAC). Unfortunately for us, we had ...
    Posted Mar 2, 2022, 7:28 AM by Intelligent Investor
  • Archive: My Stock Holdings 2020 View My Analysis: My Stock Holdings 2020
    Posted Jan 23, 2022, 6:55 PM by Intelligent Investor
  • Archive: My Stock Research 2020 View My Analysis: My Stock Research 2020
    Posted Jan 23, 2022, 6:56 PM by Intelligent Investor
  • Buying the Dip in ViacomCBS (VIAC) and Sold Pfizer (PFE) A very big opportunity came today to buy ViacomCBS (VIAC) at a ridiculously low price. Unfortunately we had to sell Pfizer (PFE). Pfizer has been a big disappointment for us ...
    Posted Mar 29, 2021, 12:09 AM by Intelligent Investor
Showing posts 1 - 10 of 61. View more »