Posts by mac36684

A complete guide to working capital analysis for stock investors: formulas, key ratios, examples, and warning signs to evaluate a company's liquidity.

Financial leverage and equity returns explained: how debt financing affects ROE, EPS, and shareholder value, plus the risks investors should weigh.

Operating leverage measures how changes in sales revenue affect a company's operating income due to its fixed cost structure. Learn how it drives earnings growth, risk, and stock valuation.

Accruals analysis explained: learn the accrual ratio, working-capital red flags, and how to spot low-quality earnings before they hit the stock price.

Learn how Quality of Earnings Analysis helps investors spot earnings manipulation, from accruals and cash flow to the Beneish M-Score and financial red flags.

Owner Earnings vs Free Cash Flow: compare formulas, maintenance capex, working capital, and valuation uses to find the metric that fits your analysis.

Precedent Transaction Analysis explained: how transaction multiples, comparable deals, and acquisition premiums are used to estimate M&A valuation.

Learn how Comparable Company Analysis works — peer selection, EV/EBITDA, P/E, and valuation multiples — to estimate a company's implied value.

Learn Sum-of-the-Parts (SOTP) valuation: formula, step-by-step method, a worked example, discounts, and mistakes to avoid when valuing conglomerates.

Economic Value Added (EVA) explained: the formula, NOPAT, invested capital, WACC, a worked example, and how EVA compares to ROIC, DCF, and residual income.