Applying the Lessons of Enron’s Mark-to-Market Accounting Scandal Today

It may be surprising, but companies today are still using the same mark-to-market accounting that led to Enron’s fraud and bankruptcy in 2001. Mark-to-market accounting is a special way to record assets on a balance sheet. I will try to explain the basics as simply as possible. While it’s hard for any investor to predict […]

Guide: How to Read Google Finance

Google finance is a great tool to use in your investing arsenal. It’s a great way to get updated ticker information, as well as news, financials, and other key metrics. You can quickly see past price performance (with this special trick), as well as 1D, 5D, 1M, 3M, 6M, YTD, 1Y, 5Y, and MAX. To […]

Historical S&P 500 Industry Weights – [20 Year History]

If you’re benchmarking to the S&P 500, then it helps to know the context of your industry weighting compared to the index. It can help to explain your portfolio’s relative performance. It can also create a “heat check” to how your portfolio is balanced, and how it might react to an upcoming economic cycle. Before […]

How to Calculate Invested Capital for ROIC (the right way)

Do you know how to calculate Invested Capital the right way? Did you know there are two different equations for the same Invested Capital formula, and they mean two different things? I’ve seen the words Invested Capital tossed around lightly many times online, and while the intentions are good, the execution is not. When Invested […]

Qualitative Fundamental Analysis: The 8 Key Factors According to Ben Graham

Investors think of Warren Buffett’s mentor, Benjamin Graham, as a numbers guy who only considered financial data, or the quantitative side of fundamental analysis. They haven’t read his books carefully enough. Ben Graham dedicated most of a chapter in his seminal Security Analysis to the qualitative factors of fundamental analysis. It is well worth examining. […]

Diluted EPS Meaning Explained with a Simple Infographic

Take a look at any income statement and you’ll see EPS (or Earnings Per Share) divided into two categories: diluted EPS and basic EPS. Which EPS figure should you rely on, and what do those terms mean? The infographic below summarizes it simply: EARNINGS PER SHARE EPS = Earnings / Shares Outstanding DILUTED EPS Uses […]

Defining a Good FCF Margin Formula: Basics, Examples, and Analysis

FCF margin is a valuable tool to understanding how much free cash a company can generate from its revenues. In general, a higher FCF (Free Cash Flow) margin means a company doesn’t need to spend much money to create profits and free cash. What is FCF (Free Cash Flow)? The basic definition for FCF is […]

What’s a Good PEG Ratio? It Depends. Simple Pitfalls to Avoid

Conventional wisdom says that a good PEG ratio is anything below 1. But actually, there’s a lot that can go wrong with that assumption! The PEG ratio is a shortcut for determining how cheap a stock is relative to its growth. The lower the PEG, the cheaper a stock is trading (relative to its earnings […]

A No-Nonsense Value Investing Checklist from One of the All-Time Greatest

Value investors come in all styles, shapes and sizes. Fidelity’s Peter Lynch was one famous brand of value investor—looking for growth-y companies trading at a reasonable price. Who better to find a value investing checklist from than the great Peter Lynch? Here are some of the items on Lynch’s checklist (“The Final Checklist”) that he […]

Practical Financial Advice for Young Adults: 11 Simple Tips

Young adults need all the help they can get. They are inheriting record debt levels and rising inflation, contributing to higher standard of living costs. But instead of focusing on the excuses, focus on the opportunities. Here are 11 simple tips for those looking for the best financial advice for young adults. Be inspired, and […]