OverviewWhat not to do

Where to find the right information

How to interpret the data

What not to do:Historical Stock Prices

Stock Charts

Historical Trading Volume

Price Multiples

Financial WebsitesYahoo! Finance

Google Finance

MSN Money

MorningStar

S&P NetAdvantage

Yahoo vs. Google

Key Statistics Financial Highlights

Financials Income Statement Balance Sheet Cash Flow

Financial Statements 5 most recent Quart

ers 4 most recent Years

All Financial Data is from Reuters

Recent News

MSN MoneyMSN Key Ratio Reports

MSN > MSN Money > Ticker Symbol > Print Report > Key Ratios

MSN Money Reports

Step #1

Step #2

Example Report

Morningstar

Snapshot Industry Peers Growth Profitability Financial Health

Financial Statements 10 Year Statements

Key Ratios Profitability Growth Rates Cash Flow Financial Health Efficiency Ratios

S&P NetAdvantageFind in the Valley Library Online Databases

Interpreting the Data

Analyzing Financial Statements

Arithmetic Mean vs. Geometric Mean Use Compound Annual Growth Rate (CAGR)

Ways to Analyze Financial Statements Common Size Trend Year over Year CAGR

4 Key Areas to Look atProfitability

Gross Margin, Net Profit Margin

Growth Sales, Net Income, Dividends

Financial Health D/E Ratio, Current Ratio, Int. Coverage

Return on Investments ROE, ROA, ROIC

RatiosROE Example:

Apple has a ROE of 27.9% - Is that good or bad?Neither. All ratios are relatives.

Correct Statement:“Apple has a ROE of 27.9% which is 8 percentage points

less than the industry average.”

RatiosGross Margin Example:

Apple has a Gross Margin of 34.1%- Is that good or bad?Neither. All ratios are relatives.

Correct Statement:“Apple has a Gross Margin of 34.1% which is 306 bases

points higher than the industry average.”

Interpret the Data“Apple has a Gross Margin of 34.1% which is 306

bases points higher than the industry average.”

“Apple has a ROE of 27.9% which is 8 percentage points less than the industry average.”

Any financial data provided, should be accompanied by a statement that answers:

What does this mean?