Module 2 of 5 in Practical stock research
Analysis in practice
Reading real statements and filings, comparing companies in the same sector, judging competitive advantages and management, and spotting red flags.
7 lessons in this module. Progress is saved in your browser as you go.
This module applies the fundamental analysis path to real documents. You will work through filings on the exchange websites, compare competitors on a like-for-like basis, and practise turning red flags into specific questions.
By the end of this module you should be able to
- Analyse several years of a real company's statements and explain the main changes.
- Compare companies in the same sector on growth, returns, balance sheet strength and valuation.
- Find and interpret exchange filings such as results, shareholding patterns and announcements.
- Assess management and governance and turn red flags into questions to investigate.
Lessons in order
Module test
10 questions, chosen at random from a bank of 32 questions and balanced across this module's learning goals and difficulty levels. Every question comes with an explanation. You need 80% to pass, and you can retake it as often as you like with a fresh set of questions.
This module builds on
- Products, customers and revenue drivers: The revenue drivers explained there help explain changes in the statements.
- Quality of earnings: Reconciling profit with cash applies the earnings quality checks from that lesson.
- Free cash flow and cash conversion: The table includes free cash flow, explained there.
- Comparing valuations with history and peers: Peer valuation, introduced there, is one part of the comparison.
- Return on capital employed (ROCE): Sustained high returns on capital are the main evidence of an advantage.
- Capital allocation: Capital allocation decisions are the clearest evidence of management quality.
- Related-party transactions: Related-party dealings are a key governance test.
- How to research a company from scratch: Exchange filings are a key primary source in the research process.
- Promoter pledging: Pledge disclosures build on the risks explained there.
- Financial red flags: That lesson explains the individual warning signs used here.
- IPO basics: That lesson explains how an IPO works.