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How Return on Equity Is Deceiving You
Analysts love Return on Equity (ROE) when analyzing companies. They love it because it separates good companies from bad, at least that is the thought process behind this indicator. However, you will discover how Return on Equity is deceiving you when you read this article.Suppose the ROE for one company is 22 and for another […]
Continue readingGoogle Sheets for Financial Statement Analysis
Did you know that you can use an add-on for Google Sheets for financial statement analysis? Google Sheets does contain a function to obtain financial data, but it’s limited in what it returns. In this article, we’ll explore an add-on that can be beneficial in this type of analysis.Why Google Sheets for Financial Statement Analysis? Defining […]
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Analyzing Company Financial Data Using Google Sheets
Using any other spreadsheet tool than Excel for your financial analysis seems blasphemous, doesn’t it? After all, it’s been the de facto standard since spreadsheets started being used on Wall Street. What happens, though, when you are working with a machine that doesn’t have Excel installed? Using a cloud-based spreadsheet package can take care of […]
Continue readingHow Much Accounting Knowledge Do You Need to Invest?
Accounting is the language of business. Warren Buffett states that if you aren’t willing to learn the principles of accounting, you have no way of learning how a company is doing. While it’s true that the more accounting you know, the better, it’s not necessary to be a CPA to become an investor. Besides, accounting […]
Continue readingWhy I Love Dividend-Paying Companies
Dividends are the lost souls of the investing world. They aren’t glamorous. For several companies, dividends only pay out a few cents every quarter and represent companies that are no longer considered growth companies. Price appreciation for these stocks are limited, or so the thinking goes.But, here’s a twist. Did you know that during World […]
Continue readingLEAPS as a Substitute for Stocks
Options investing is a great vehicle to enhance your portfolio returns. But, people are often confused as to which option contract to choose. The situation is complicated because you’ll have to choose from many different strike prices, across several expiration dates.Using LEAPS, short for Long Term Equity Anticipation Securities, are a great way to leverage […]
Continue readingIs Every Item You Own Considered an Asset?
You buy something at a store, and you use it for a few years. Then, the item is no longer useful to you and you decide to sell it on eBay. You get much less than you paid for it. Would you consider this item an asset for the time that you owned it? Technically, anything […]
Continue readingSimplifying the Income Statement
It’s a bit dangerous to propose that the income statement of a business can be simplified. If you were to make a business decision (stock purchase, buy a business, etc.) just from this idea, you could find yourself in a heap of trouble financially. However, simplifying the income statement is a good place to start your […]
Continue readingUS Government Teaches Financial Statements
Did you know the US Government teaches financial statements? Now, before you get too excited, the information given on the governments website is basic. But, it’s certainly enough to gain an understanding of the subject.Part of our taxpayer money is used to maintain the Securities and Exchange Commission SEC. This is the government body that […]
Continue readingShould Young People Take More Financial Risks?
I often hear the advice that younger people should take on more financial risk. They have more time to recover, so the thinking goes. But, this advice is nonsense. In this article, I will bust the myth that young people should take on more financial risks.Young People Make Less MoneyWhen you first started out in […]
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