The analysis uses line items from the financial statements of the subject companies. Many items are commonly used across industries, while some items are unique to a few industries (or companies). In this section, you will find an overview of the common items. A discussion of the less common items will be provided on a case-to-case basis within the analysis of the specific subject company. Except for the Key Operating Assets, I won’t spend too much time explaining most of the items because there are many credible and useful sources out there. As such, links to other sources are provided for further discussion on the topics.
KEY OPERATING ASSETS
The following Balance Sheet items are usually part of a company’s Key Operating Assets and are explained in the context of how these are used in the analysis:
- Cash and Cash Equivalents
- Investments in Financial Instruments
- Receivables and Payables
- Inventory
- Property, Plant, and Equipment
- Intangible Assets
ECONOMIC PROFIT
The Economic Profit framework enables us to assess the performance of a business beyond the standard financial statements.
EXECUTIVE COMPENSATION
In addition to financial statement items, our analysis uses Executive Compensation as a key input.
