Mastering Fundamental Analysis MicgHaeL G. THomseTT EM Dearborn Financial Publishing, Inc? pertnaeed suid Dust Cyc a Ze mad vio? ty enor Bre uit ‘luatetssaned The te fd pbicaono ac parte a ee be ep ‘veda ts hora i wu ya oe Aa ito a Ue Saf Aton Lyrry Cangas Catt Pain Day “ane Mitt ‘arse rc a: er pa on i ing Bera: Mil, Teen. - Ioana erro Teatbom sks ae hea pis seams somes pcs als uel, of Ca ue in Capats Une pac Fs se howe eae Ea be Sosa Sale Mage a 20042 LAL, ca BES, uc ao Te tae rs Patig I98, Wu Ee, Cg A 8 C9, CONTENTS Profice Whos This Rook Wilt De for Tow Insvoducion The Big Sect ks, Thove Bs No Big Seow: Desinng the Funan lata Ya Noe ‘Tieng 0 Finacial Iatonnicon-—vererday's News ‘Tae Relish item —Aceuracy ofthe Neen Finvelal Rating. Hos Thoy Boe Heri Whe They Ae Tiny ok rele Secret Wes t 4 S. Viskicy Apstthe Kgancale asi That ea Think a z s Petigg Micke Services to ot, How co Beaty Bo the Stock Listings {What Makosi Presa Caan Fewemi fdas co Gragg te concn Diag Bune ovatng cr The Mea athe Catan Founder Sparaia Meaas ‘edible fetigues ee See cesta Chest sles PREFACE What This Book Will Do far You AS at inestor, you want ane need basiv information te seer a coaaysry whose sks wil tee! your investant gous, Yau need Use Iondamentls—inferstien bout x copes thot tee you aout Financ consistency wud reliability, profi. dividends. property und een oe other dotlars-amt-cen nforraatinn, Site, ssighitorserd‘nioviation an practi Sia i te cer ind, Whom gow hegin rsaing reports prepurd By sevens, land nals yon eam lose your aca, nkose yom ane facial "exper Youuselt. If yon depen on bucks Fa infociatoo a ecah ina copy’ Suidomnentls, you Hid thal basi inforasivn is wel Jy dificult wo ovate—uil no this book is erie for fnvesters, not Cor Hnanciel expets. if you, swim lo ieptuse your nell al fundamental anslnis, ts 0k = Lor ym Leads you row rehing and analying fan anal finan fal infommatian in az 5 pafit, spy aad demaydl inchs strong, managuancne abi, su oboe Lisle allesting # susKes ‘eauket vate and gioth pore ‘Fe ths exter Moat quath is evessy abe pat this bau. me wil] explain the proces step by sep. provi excampes. sad wath ou rough Ide explanutva, Ys sul ame need inden. matical udvice Lenten your nnetment nee, atl this honk wll acres shal nee, {We void swoek marked lay inormmison ia el hy nasa iste wha apes rose ve i echnies ems anid wert Ststial rsa ing to sorananieare wth ane anesthe This hook, verier Fa tbe nonaccounta he wats brake incest neat iaFoutien, teaches you to Muster be esses of Hacc tangas, These include sudyiag, fisesial stalecrena, unespreting Trend, using ratios, and musing nforined decision asd agile taleraion. Uns vs possible witb hang lle couse i hehe level sscounong or Seumtiea! analyess. Coraidy, tore as ¢ ned fot viii ase. Wha Tie Book Wl Oe Fn ou ‘eanical eommmaicaton aunwag facial pralesivnals, essere tk loot ant alee sewr aeeds us a iavesloe, Tk gp in eke infer Hon veeus invariably in communication, between experts whi have the infuration apd nouespers wlio need te iformaaion. “This basic, pactcal guide uses u sees of tots ts help bree dows ecm does at eomespla so Unt sou can make practical uke of the {nirmation, "these wos elude worksheets an forma seu cam nse ta samp information sbaut ‘eempames and compare i 4 raphe and ear to expect the ideas hehind columtas and set BF mounbote in a sey that makes stuse To bel visualize sells; + checitns of wetvn ews au points worth remecbeding + escrmptee iat laf aad Mesa impuntan poi + deiniuons phived in women! ay Ut adeus vim soross clear, 8 you can vero jrgn ued by “ochre exper + key points et aside ard bighlighod for ease of cenit: and + cealbrheaegi 19 help wth procceee such 36 mathematical fiom CCallestival, these tools ll help fou teach yourself the ssscatal acs uf fuuanaesal sankysis, Ine avoid “ke vouplexiies ule ase vate wid Gnstie. We all end esish ee auformbou, even whe swe aoed il, This book sill help you osevorae the remlaate scl achiewe a mastery of the valuble ols yeu need to make informed decisions, Narking inthe sy af financial information i 30 complex that amis gesped fy the avessge inwsor, Na ple isso technical tat ‘yon eannat fallen tha cance, and hte age na ens cot axe avaiable fly tothe eahnican. Those ess and eoucepts wil be explained sia land thouonghly 36 sou si ame use of hen, “ INTRODUCTION The Big Secret Is ... There Is Nu Big Secret Val the wn seure the higgest soem a Wall Smet —and ot any specalied musty. Wey itl in thetimuncel world ee eames thae Sau carnor grasp it Ths fundamentels age a3 thsic mame imoliss—toedamommal, basic, anenmpliatsd, The only factor sump ‘ating Finaacal informacion: ago, oscil coupler silica way Sis, aad comple formulas that don't convey iafucraativn aay beuee ssa anh ak Tor instance, he eeseutial purpose of preparing ficial report sp elurify und cormmanicals fnformation. ‘The basit af furdarzental swalyss is accountng, znd secounting links mors than eh ropercing se tranetcrans: where money smd obligations gan Frou aad where “ey go. The hestaeccating systems ae clear end simple, 20 a5 ao the money. Agcouncing aso ie designed ro help awaiyts spot els and Loneeast Hikes ouleuines bused on those tends. This book, leals msialy with the Use primery purposes of nancial reprcine: simplicity m internet the nomers, an analyse hosed om those nurches ‘Win the vas. amount of formation avila throwgh, publication of sineneial ssremomes, analyser” repr, the Timm! press. and the Income, a Taege pat of 7 intorperion-gatheving ask is already por “cmd He yon. The dict thug for sou as a vest is tu dete ‘sic. dnformadon fo se. Not all of e vas artay of avaiable data is felisble.telesoot, oc especially useful i waking the devisow #9 bus, Soll, or sll u mice stock, This beuk, Cit uf al, assures that al of the ination investors need ve eealily wv tat i¢ cum he undertod sarpetety i its amined ime explained peeperty, sl dua the real challenge fer the invowtor in bridging che ep hetscen fining intermaian and mpl ng tp it ths decision-making aracese. To adegres, ancy all unalog the Fag Sere Is The Is Ii Sera performed for you ag services tke Valno Line and Standaed Pont’, nor r+ meat Ibe ina abalysis going cm onetenty in the Fmyicial press, Second, ts book is carstlly designed ro peescnt information ina bighlysistal maanec, This inelrdes Ce amphesis at Leg pings Yor ease of mleienve; geuerurs use cl explo, obats, oct. ia works Heels; penly of exannplerock-ltuoughs Lor usa cermatival procedures: und definitions provided when aterm or phrase is fis. inanduced, “These ols ane lechniquer che Canduri anclyois pratt fend relly aaah yin Unlike many investmme prozrims tha propicss 1 xpuanteausthou, we cn mie sagese that exe'yone. sill he comfortable oth cme appreach. This hoa cxpleas has cach rye o° fundamental interna Uist pas arnt a it sows iis hil you to ids whi cechnigne sbuthl be elven te greatest weighr. oF which should cvou be ased xt all The basic assumption is Ua, as am indiidual, each inestos wes tw el cp progr: for sina cola ad ese “Tose sore Uh the tests yu dei appl inormsivn ae wid and meaningful, thix ok augeeste possthle way te approx the anadysis a sek. potion industry or poatieularlrvtegy. The Inetinn is give gn the ‘ntormatin wo deeie hows t passed. aed ‘a your potsonel scaly, sk elerance, macket atime and pilose buy, aad persualil, This uk aero ab auagie Loam, antl? aoe show you ue get ih quick” aoe uncut alysis 23 sow au bow ts "go infer quick!y” in the belie tha having poo Snfriaon less god devivon raking, and hat decision cake sre round Uneug s05sess and pits CHAPTER 1 Defining the Fundamentals— What You Need Mes iswestrs aegona on financial information m9 jntge came hes. And by nor? Dallas ve how Imsivess keeps scone, judges s0e- ess forests the litre, aud determines who i outpeconaing the competition. Taaderuental ralyis is the raethad chive because i Tinie dependale, comsister tarmtton ‘wha un sou expect trom fundemental ust ant why pein analysis a at? Those questions axe gor suuming points fseatse hey stablich the very rousnme to andsrake analysis, Fundamental ts cee than sagthig scancaus Jog sounpasioa, WE aM MS hudgens vale LF comijaving oue Diag le auellee, We duu’ huge shat our peeferences are unl ¥e Jock at to oe nove aleatives. This isa true ine stock mike iis everywhere else, Fundamental tess area consisent application of standurés io several omipanies, We bape the rele af those Lents wb gunds us im aor deenions to soll une ‘Stoo ewer enothe:; end then i bay, hold, oF sll ur why peririn alysis all? Why noe simply chase wooks hy Jang rts arcs sek lssings? Som people make an argument 3a mndom celecion of stocks ig 9 afectve 4 method ae any kor. ‘The somone wv shew Fo esaumple, says stork peicas bane in 8 sunt and bapfelicisle muse, sed Oat the elf. 9 abr ions som ut tke pS Ta be predate wil uy dere of eval Anyone wao reriusly appriuches auvesting ha 4 ues he vig of the random wale their. Tt just make sens that sade 2 Maieing andamensal Anassis Insaco, nic ifouaton stout a compiny leas tt nelle yt sac selcta se Us Ele ws pain reser h oy esl in Bd caine low of uae, Me euple are a dig beer dam ay doy ese ‘sect agar concn he macho th fea rar ery, vic sat thas the eure ples ob ele ote ncn ne tnaion ab the spare heoy alin ate faa nw na Ho ces re cng eae pice in ry “Tee theory times Une see TO pen Me maT a 8 eps mak of infocmaton and nigel sso les Es ‘stnaon cma an rei yt pepe has Unt th ok, fnedkel Has a dive of sacs wi. and Ut such efieney atspor ‘esl “Een ikey eats sae lnfnmaton are scot Uh ceva the intoraten, uc nla am uke ces ne rice teeponaiy ewereue prety aetng the ps Uh easy 0 theore abok mike ores, sly ana demand an thc peyehnngen cans fhe pend inert whoa “aly Soong Reo he antet wees. Such ss aor of ees 818 sce pie oat eis bow ke Dace hs gH e te ier Kio lo ick sucks, Becuise pies car, fu wilt obvious vane an elec degree of exitment sumvamds stock ma tel imesing, Thal extent make easy all no be tees that re os Tn em, a inaret pies ek fl a ene va ath he 9 thn any no aga r randmearyResed forme, Defining Fundamental Analysis Fundamental antysis 6 a met of voserey thas audios bse Fiaanena. ifinnasinn to foreest profit, apply and desrand, incantry "arongth, management air, and athsr intins mares atsoting @ saeek’s markct wan aad grcath goteatial, Tho .eseltiug doe ation sm bolp you msiowsin gerspecdve. Covsinly saa aspecys, of pre Inewemest inthe soe wire sr heya ogi, sa allie to voue with 9 Iggiva: vind, The lnnameatal— those inte facts aboot a wompuay ca Be used ty Toevi,finnsial performace and, te sume 3egtes. stuck price movements, More invetnns ese fundamental ban ather wth, Nenfundarzenaii mthous ane urlletvely kine Whose tvag A ENfiing ne uct secu ins, The Ustiaiot ceuical analyst Gur “extn shrasTindienr, often on te PAU Gn snl sporty Is lubiely Dott, yer gaps old imation. aud by te very anne, ‘fag us, Avoodingy, sh iforaacin is een 1a ih howe 8 Sox} eae! price will use tolaoc oe De est hy “oth fardarsenal al tenia aulsis ues en, but de, seaps Te funda aponch ena Mua inormaliveteisi dene nes, ls len. Coe Mp) Treen Rapa ests “eetaien ute ends Tetaial nays is Mighell lnely ignvor the hae poms of eappy ani mands hein ste th sNentt price conde (rumen ve chins dette furs pees suosems ssc he eating Doe 8th ea of spp teat ete dunce foe, Thess Ives a6 dev tou 3 study ata socks eer Prive changes. hea ds price nes Neots ae eel hee Ecvenpoted pri) ur ave i esac eel rice). thot i called bale atic a poe i tuhlhed range. Che concep of suppoet and resistive vel 003 Tsk ire nirnaiced i Fy C even Inne whi son by Uke Tomes nhould reese Ut technical annie serves waefal porpn. Hut tev the mos [lh Tel ot goiner ertneere can ignore ha widasperad et Fade reall indictor hat an mors baths? pees fr ahewe oF Felow HIGURE TA Toning Range Mt ‘in i i ie N