What This Articles Will Do for You

As an investor, you want and need basic information to select a company whose stock will meet your investment goals. You need the fundamentals—information about a company that tells you about financial consistency and reliability, profits, dividends, property and debts, and other dollars-and-cents information.

Simple, straightforward information in a practical format is difficult to find. When you begin reading reports prepared by accountants and analysts you can lose your way easily, unless you are a financial expert yourself. If you depend on books for information on evaluating a company's fundamentals, you find that basic information is equally difficult to locate—until now.

This book is written for investors, not for financial experts. If you want to improve your skills at fundamental analysis, this book is for you. It leads you through researching and analyzing fundamental financial information in order to forecast profits, supply and demand, industry strength, management ability, and other factors affecting a stock's market value and growth potential.

To the extent that math is necessary to make a point in this book, we will explain the process step by step, provide examples, and walk you through the explanation. You want and need intelligent, practical advice to support your investment needs, and this book will address that need. We avoid stock market industry information controlled by analysts and accountants who express themselves in technical terms and use detailed statistical modeling to communicate with one another.

This book, written for the nonaccountant who wants basic investment information, teaches you to master the essentials of fundamental analysis. These include studying financial statements, interpreting trends, using ratios, and making informed decisions based on tangible information. This is possible without having to take a course in high-level accounting or statistical analysis. Certainly, there is a need for technical communication among financial professionals. However, that does not address your needs as an investor. The gap in market information occurs invariably in communication, between experts who have the information and nonexperts who need the information.

This basic, practical guide uses a series of tools to help break down technical ideas and concepts so that you can make practical use of the information. These tools include

•   worksheets and forms you can use to compile information about companies and compare it;

•   graphs and charts to express the ideas behind columns and rows of numbers in a way that makes sense to help visualize results;

•   checklists of action ideas and points worth remembering;

•   examples that clarify and illustrate important points;

•   definitions placed in context so that ideas come across clearly, so you can overcome jargon used by technical experts;

•   key points set aside and highlighted for ease of recognition; and

•   walk-throughs to help with processes such as mathematical formulas.

Collectively, these tools will help you teach yourself the essential elements of fundamental analysis, but avoid the complexities often associated with finance. We all tend to resist new information, even when we need it. This book will help you overcome the resistance and achieve a mastery of the valuable tools you need to make informed decisions.

Nothing in the study of financial information is so complex that it cannot be grasped by the average investor. No topic is so technical that you cannot follow the concept, and there are no ideas that are available only to the technician. Those ideas and concepts will be explained simply and thoroughly so you can make use of them.