How to Analyze an Income Statement Like a Hedge Fund Analyst

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This video covers how to analyze an income statement. How to analyze financial statements is one of the most crucial elements of fundamental investing. In particular, an income statement consists of a company's revenues (sales), its expenses and ultimately the company's profits. This video is an introduction to financial statement analysis for beginners.
After watching this video you will have a better understanding of the following questions:
How to value a stock, How to analyze a stock, how to analyze financial statements, how to analyze financial statements of a company, how to analyze an income statement and balance sheet.
Go to pblc.co/center and you will receive a free stock worth from $3 to $300 once you open and account and make a deposit.
Link to Investor Center Patreon where I post all the tools and resources I personally used to grow my portfolio to $300,000 at 24 years old:
www.patreon.com/user?u=38414104

Опубликовано:

8 авг 2024

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Комментарии : 339

@InvestorCenter 2 года назад

If you are interested in downloading the spreadsheets I used to analyze stocks, you can download them here: www.patreon.com/user?u=38414104

@InvestorCenter 2 года назад

@ehvio the second and third tier

@user-ph1ui9jg6d 2 года назад

Hiya - this was very insightful. Do I need to sign up to Investor Center to access your spreadsheets. Furthermore, can you please make a video about how to determine growth percentage when forecasting metrics such as revenue or costs?

@InvestorCenter 2 года назад

@@user-ph1ui9jg6d yes. I’m going to post all of my spreadsheets that accompany my videos to the patreon. In terms of the growth rates, I’m working on a video for that!

@user-ph1ui9jg6d 2 года назад

@@InvestorCenter Thanks so much for your response. is there any other way of staying in touch for example: linkedin or instagram or is youtube the best way?

@thor4379 2 года назад

Thank you for the video. Can you do a video about balance sheet analysis as well?

@joealtamuro 2 года назад

You mentioned early in the video that you didn’t know why companies would close their books in September instead of December. It’s usually due to “seasonality”, when sales are at their lowest in the year coming off of the summer months. Therefore Net Working Capital [NWC (= Inventories + Receivables - Payables +/- Net Accruals)] should be at its lowest in September. Don’t forget Apple usually releases new products in the 4th quarter so inventory levels should be at their lowest at the end of September. By Closing the books when NWC is at its lowest, Capital employed will also be at its lowest. This will maximize ROCE. Also, it’s just best to close in the quarter with the slowest activity so as not to distract the company from the busy holiday season. Most retailers also operate in this fashion.

@InvestorCenter 2 года назад

Wow! That is very interesting. And it makes sense that most of the companies I see with a September year end are retailers

@indranilsinha4899 2 года назад

wow ..great insight ! thanks a ton ! How about Microsoft it closes in Jun ??

@joealtamuro 2 года назад

@@InvestorCenter Thank you and I just want to say that your videos are excellent!

@BradDietz 2 года назад

Most retailers (not Apple) end their FY at end of January. Very few end in December because there is too much Y/Y noise due to calendar shifts. This is also where you squeeze in a 53rd week every 6-7 years.

@gauravthadanii Год назад

can you explain in a little more detail, how the capital employed would be at the lowest at sept?

@FFR2099 2 года назад

Great, great presentation, I really enjoyed the way you showed how to make a discounted cash flow model in a simple and objective way. I'm studying valuation, but it's really hard to find practical content online, it would be awesome to see a whole series on how to make a proper valuation of a stock and how to read all the three key financial statements (Balance sheets, Cash flow and Income Statement) and how to use the financial ratios (PE, Price to book... ) with a detailed breakdown of each one.

@jamieamato560 Год назад

I'm only halfway through the video and I just have to say your explanations are by far the best I have heard so far. I've been researching how to analyse companies for investment for months, it's been slow progress. Although I was familiar with most of the terms you were speaking about, my understanding of them just trippled thanks to your breakdown of each of them. Thankyou so much I will now prioritize this chanel first, amazing video 😄

@lorenvillaverde2564 2 года назад

I commend the video for comprehensively presenting the idea that Accounting students learn in Financial Analysis!

@MI-kn3id 2 года назад

Love the idea behind this video and how you kept it simple. Can you go over projections in a separate video we’re you give a few examples /repetitive so it will the process”sinks in” and we can better apply it to different companies/modules. Thank you.

@ftnavy123 2 года назад

This is one of the best videos I've ever watched on income statements and really filled a lot of gaps I had in my knowledge of why I should care about different items. I would LOVE to see you do a DCF video.

@InvestorCenter 2 года назад

Thank you, Josh!!!

@jrums 2 года назад

Awesome explanation, clear and straightforward. Thank you!

@gt3rsm3plz83 2 года назад

Thank you for making this. You have a great narrating voice. Very easy to understand.

@althe 11 месяцев назад

Gotta say, your videos and explanations and graphics and topic choices are way superior to everything else (in this genre) on RU-vid.

@aroaris843 2 года назад

Great and simple. While others try to make difficult to understand content yours was very fluid and amazing !

@InvestorCenter 2 года назад

Thank you! I really appreciate that

@profit_paradox Год назад

Would love to see a video that covers the projections for DCF valuation which is ultimately used to determine if a stock is undervalued!! Very helpful

@BSI_Inc. 2 года назад

Thanks so much for this video. I hope you also teach us how to analyse balance sheets and cash flow statements and the financial model too coz I personally am still unclear about that

@InvestorCenter 2 года назад

I’m working on those videos now! Thanks for the comment, Allen

@BSI_Inc. 2 года назад

@@InvestorCenter looking forward to it!😁✌🏾

@amossenkao385 2 года назад

Thanks for the great explanation. Can't wait for the ones of balance sheet and cash flow!

@rosalieroku3818 2 года назад

Excellent presentation. I understand this better now. Yes, more on your spreadsheet please.

@luxurylife7464 10 месяцев назад

Your videos are wonderfully put together. I would greatly appreciate if you do a DCF model video in the future. You explain things with great ease and would be helpful to understand your view point on discounting cash flows. Thank you and keep up the great work!

@malikdey-nativemoor2923 Год назад

Discounted Cash Flow Evaluation would be so helpful if we were explained in detail. What an amazing channel. Just found this channel looking for how buffet calculates intrinsic value and what a library of information, I stumbled across. Thank You! Investor Center, for delivering amazing Content and great VALUE!

@matthines4507 2 года назад

Great video, I am very interested in how you set up the income statement for predicting the future performance of the company. I would love a video on how you set that up and as you mentioned deriving the cash flows from that. Thanks

@sev7n102 2 года назад

Fantastic video! I love how clearly and thoroughly you present information. You may want to look into teaching, consulting, or creating a course.

@InvestorCenter 2 года назад

I’m thinking about creating a course!

@danbuild977 2 года назад

Just what I needed. Thank you so much for this video.

@straightshootskeet 2 года назад

Great video, simple and understandable thanks!!

@jclopez99 2 года назад

Excellent series of videos. And, yes! Please do a DCF Valuation video. This would be very insightful.

@Honch79 2 года назад

So well explained, thank you - keep making the videos 🙏

@monnombre6547 2 года назад

thank you! you do a very great job simplifying the terminology & explaining...what about a "how to analyze" cash flow statement & balance sheet ?

@InvestorCenter 2 года назад

I’m working on those videos now!

@Toys4Life 2 года назад

I needed this - thank you!

@onceuq 4 месяца назад

Excellent content! Thank you for your wisdom, and soothing voice.

@meshari.alswainie 2 года назад

Many thanks to your professional analysis- Meshari from Saudi Arabia

@user-wb5pv8ei1g 2 года назад

Thank you very much for your job! It`s super useful and very very interesting, can`t wair for your nex video about financial models!😀

@InvestorCenter 2 года назад

Thank you for watching! Stay tuned for that video :)

@mariecamero 11 месяцев назад

I'm a beginner and slowly trying to learn how to analyze financial statements. You mentioned the basic financial model you created and yes please cover it in another video. If there is already, I apologize and I will watch it after this video.

@lonniehardy3985 2 года назад

The different fiscal year end dates are caused by the company's adoption of four periods per year consisting of 13 weeks each. Notice each of the four periods end on a saturday. This method causes each of your quarterly reports to contain the same number of weeks (13) and each of your fiscal years to contain exactly 52 weeks. It makes accounting a little more complex but yields exact comparability. Sometimes an accountants nightmare, but worth it in the long run.

@InvestorCenter 2 года назад

Interesting! Thank you, Lonnie

@aggariba Год назад

love the way you explain, thanks

@erickgomez8758 7 месяцев назад

Would love to see the DCF valuation video!!!! You break things down perfectly and thank you for taking the time and effort of creating these presentations.

@DreaminBig Год назад

That was a really good tip. I’ve heard of comparing statements of a company to another that is in the same business. I didn’t know how. You said to compare YoY% and it’s such an obvious thing that I don’t mid my think of lol. Thank you

@chrischoi4484 2 года назад

Really clear and well made video. I look forward to your future content!

@InvestorCenter 2 года назад

Thank you, Chris! I look forward to your future comments on future content!

@georgewyatt2924 2 года назад

Very good job of explaining these items. Thank you.

@domceja62 2 года назад

Great video! Very clear and concise!

@InvestorCenter 2 года назад

Thank you, Dom!

@yazmut 2 года назад

so well explained, thank you for the edu

@davidwestenburg9165 11 месяцев назад

Geat stuff so far!

@WDWysong 9 месяцев назад

Wow...outstanding, clear explanation...very helpful. Thank you.

@InvestorCenter 9 месяцев назад

I’m glad it was helpful!

@emmanuelgoutonde8216 2 года назад

Very useful video, Thanks for your hard work!

@aishwaryakochar3334 2 года назад

Totally amazing. You kept the information and time both concise and useful. Could you also upload the DCF video which you mentioned?

@michaelflynn1617 6 месяцев назад

Please do make a DCF video. All of your explanations have been so very helpful and DCF video would really put it all together ❤

@isidorocn7982 2 года назад

This video has been super useful, thanks! And it would be great if you could do another video on estimating future earnings from the income statement. Thanks!

@valerio727 2 года назад

Great video, thanks!

@InvestorCenter 2 года назад

Glad you enjoyed it! Thanks for watching!

@javieralessandro8850 Год назад

Great video!!! Thanks for share!!!

@ADITYASHARMA-xp3sv 2 года назад

i came looking at bill ackman's photo(possible click bait) but boy oh boy the content - spot on. Great job

@trentonbillie7 Год назад

Thanks for the vids… learning a lot!!

@InvestorCenter Год назад

Thank you! Glad they are helpful :)

@nattsirojussamarn980 2 года назад

Great explanation Would love to see additional video on DCF valuation. Cheers

@meheh002 2 года назад

I'm bumping this up!

@PeakperformerEmil 7 месяцев назад

I have a comment for 6:00 - 7:00: The margins of the products and services are actually really important and I personally have never payed attention to them. From now on I will. They are so important because you can see what position you want the company to be scaling. Therefore it would have been nice if you did show how to calculate it. For those who dind't understand, it goes like this: (Service revenue - Cost of service)/Service revenue = Service gross margine. And further down the line, comapnies can't scale their Gross Margines for ever, that's why you actually can't expect them to be scaling and scaling and scaling, because it's unlikely going to happen. But they defenitely should keep at least a stable Gross margine which is somewhat high. At least that's my point of view. Great video, I love it. Lovely greetings from germany

@joelchauho-gmail7630 2 года назад

Thank you for this video. It helps me a lot of this report

@InvestorCenter 2 года назад

Glad it was helpful!

@joelavoie9768 2 года назад

Fantastic video, thank you for sharing! :)

@jwia007 2 года назад

Please teach us more. This is awesome

@TheKerth 2 года назад

The reason why some companies report its financial statements not on the year end it is because they report their FS when the company is on slack season which means movement of assets are very slow, in which the management believe it would capture or would be more representative of the company financial position

@InvestorCenter 2 года назад

Very helpful! Thank you!

@JedWunderli 2 года назад

Love your channel. I'd love to see the video that you talked about doing at the end of this one. I think that would be very useful. Thanks for your time and effort.

@elpapasongote 2 года назад

This is great! Thanks!!!

@InvestorCenter 2 года назад

Glad you enjoyed it!

@marvinschnee5574 2 года назад

Great job very informative

@Internetjim1235 2 года назад

Really good presentation- keep them coming

@InvestorCenter 2 года назад

Thank you!

@DreaminBig Год назад

Incredible!

@danny100d 2 года назад

Thank you, again!

@anandpatel2624 Год назад

This is a great explanation and one very important. Thank you so much. Could you please do one for the DCF?

@peterq9359 2 года назад

Very helpful!

@InvestorCenter 2 года назад

Thanks for the kind words, Peter!

@HariKrishna-mi6is 2 года назад

Wow. Super good 💕

@TheRustyLM 2 года назад

Thank you Thank you Thank you 🙏

@InvestorCenter 2 года назад

You’re welcome You’re welcome You’re welcome 😊

@alexandermaseka6463 2 года назад

thank you: this is gold right here

@InvestorCenter 2 года назад

Thanks for the kind words Alexander!

@SebastianRodriguez-ep9cm 8 месяцев назад

muy bueno , muchas gracias

@shubhamtailang2184 2 года назад

That was a wonderful explanation in laymen language. If you can explain DCF in detail and simple language that will be great. Thanks

@2023Red 2 года назад

super job!!!

@InvestorCenter 2 года назад

Thank you!!!

@eFFecTM 2 года назад

Great video! I came across your channel today and started watching many of your videos while taking notes. I love how detailed you explain things still while trying to keep the overall video compact. I would be very interested to see a video from you on discounted cash flow valuation. Also, happy new year!

@eFFecTM 2 года назад

Oh wait, you have made a video on this topic before in September.

@InvestorCenter 2 года назад

Happy new year! I will do a more detailed video on discounted cash flow valuation!

@Saad_TheGod 2 года назад

Great Vid!

@davidschroeder3580 2 года назад

very informative and like the way you broke it down

@InvestorCenter 2 года назад

Thank you, David! Glad you found the video informative

@vvamongus9956 2 года назад

Great 👍 👌 job, thanks a lot, how do you determine if a company is undervalue today? Maybe when you have time you can make a video about it. Thanks again. 😊

@InvestorCenter 2 года назад

I’m currently working on a video that explains that concept! Make sure to be subscribed to the channel to see when I post that video 😊

@jonandrews3528 2 года назад

Very informative

@InvestorCenter 2 года назад

Thank you, Jon!

@izaactorres5741 2 года назад

Definitely want to see you breaking down discounted cash flow

@annasillanpaa1111 Год назад

The calendar year reporting relates to when the company was established, otherwise the first reporting would be for 6 months and 21 days or what ever which would be difficult to compare to the next ones.

@clementkubica4093 2 года назад

Great video

@lukeallen282 2 года назад

Thank you for your video! Please also prepare a video on discounted cash flow analysis to determine if the stock is undervalued.

@InvestorCenter 2 года назад

Hey Luke, thanks for the kind words! I will be coming out with that video!

@lukeallen282 2 года назад

@@InvestorCenter looking forward to it!

@julienthefirst9151 2 года назад

You have a beautiful voice! And good content too :)

@awababd-arrahman3104 Год назад

Thanks, lot for your deep work. Can you tell me "For how long should I analyze these statements"? last 4 quarters or last 10 years

@fahrenheit9593 2 года назад

thank u so much

@1013eden 2 года назад

Great video we need more contentl ike this and please do a video on projection

@mayankshankar1950 2 года назад

good stuff!

@hoopie1022 2 года назад

Thank You

@marshallhosel1247 2 года назад

Thank you

@alejandrovarona1309 2 года назад

Congratulations, you do an excelent work. Please do the discounted cash flow video valuation. I am eager to see it!

@minipwn0422 2 года назад

I work in corporate accounting for a publicly traded firm and we have our fiscal year end in October because we would struggle to get everything done with the holiday calendar in December and January

@flmjohn 2 года назад

Great Video and presentation to understand the concept, could you please make a video to calculate share price basis income projections. Thanks

@justducky8508 2 года назад

Yes please make a separate video discussing under valued stocks

@edcortes5764 2 года назад

Well done.

@InvestorCenter 2 года назад

Glad you enjoyed the video, Ed

@ron403b 2 года назад

I would be interested in learning about the discounted cash flow evaluation.

@InvestorCenter 2 года назад

I’m working on that video!

@jackbrady9738 2 года назад

@InvestorCenter 2 года назад

Thank you, Griffin! The support means a ton! :)

@donraquel 2 года назад

Thanks 💃🏽

@InvestorCenter 2 года назад

You are welcome 👌🏻

@ghosm9855 2 года назад

Very informing and great content. However, I was wondering do you not consider the consolidated statement of comprehensive income??

@parthkishore9714 2 года назад

Great Video, also do a Discounted Cash flow Model will be really helpful.... 👍

@AdrianFernandezFazio 2 года назад

Great video! An explanation of Dcf will be nice. Greetings from Argentina!

@InvestorCenter 2 года назад

Greetings from New York City!

@olivierlemoine9415 Год назад

Great stuff -- Would you by any chance have an available copy of that spreadsheet model you use to perform your long term sensitivity analysis?

@samman5395 2 года назад

Your videos like this are so much better than anything else on RU-vid. Please make videos about how to analyze the cash flow statement and balance sheet please!

@InvestorCenter 2 года назад

Thank you, I really appreciate the kind words!

@peteryusufov7589 2 года назад

Yes, please do make the videos you mentioned in the end of this one!

@jaysant6958 Год назад

In case anyone is wondering, “The difference between them [gross profit margin and operating profit margin] is that gross profit margin only figures in the direct costs involved in production, while operating profit margin includes operating expenses like overhead.” From Investopedia.

@maguilla 2 года назад

I like your channel and I also like to suggest The Interpretation of Financial Statements: The Classic 1937 Edition Book by Benjamin Graham and Spencer Barrett Meredith For the ones with the desire to learn beyond your great channel