StockEducation
← Fundamental Analysis

Chapter 22 · Checklist, final project and glossary

The one-page checklist

Run this on any listed company before forming a view. If a line cannot be answered, that is the finding.

28 of 30 · 7 min

What each ratio family answers

Valuationexpensive?P/E, P/B, EV/EBITDAReturnsuses money well?ROE, ROCE, ROALiquiditycan pay bills?Current, QuickLeveragetoo much debt?D/E, Interest coverall four come from the same three statementsa ratio only means anything against a peer or its own history
Ratios are not a list to memorise. Each family answers one question, and you only need the ones whose question you actually have.

Business

  • What it sells, and to whom
  • What stops a competitor doing the same
  • Where the sector is heading

Growth and profitability

  • Revenue, EPS and book value trend over 3–5 years
  • ROE and ROA against the sector
  • Margins at every level, and their direction

Financial health and cash

  • D/E and interest cover, and their direction
  • Liquidity — or CAR and CD ratio for a bank
  • OCF ÷ net profit over several years
  • Free cash flow

Valuation and dividend

  • P/E and P/B against sector and own history
  • EV/EBITDA where capital structures differ
  • An intrinsic value estimate with its assumptions written down
  • Dividend yield, payout, and whether cash covers it

Risk

  • Debt and refinancing
  • Related-party transactions and governance
  • Accounting red flags
  • The sector-specific risk — NPL, hydrology, combined ratio, utilisation

Decision

  • Fundamental score
  • Intrinsic value and margin of safety
  • The thesis in two sentences
  • What would have to happen for this to be wrong

Saved in this browser only — there is no account to create. Clearing your browser data clears your progress.