Financial statement analysis and common stock valuation

If you are an investor who values fundamental analysis, you are in the right place. If you need comprehensive financial ratios, read on. You already know that the analysis of financial statements allows you to buy cheap and sell high, now it’s time to put it into practice. Stock Analysis on Net is here for you.

Example company for today:

Target Corp. (NYSE:TGT)

Analysis of Debt

Analysis of Liquidity Ratios
Quarterly Data

Measures the adequacy of a Target Corp. cash resources to meet its near-term cash obligations.

Analysis of Solvency Ratios
Quarterly Data

Examines Target Corp. capital structure in terms of the mix of its financing sources and the ability of the firm to satisfy its longer-term debt and investment obligations.

Analysis of Liquidity Ratios

Measures the adequacy of Target Corp. cash resources to meet its near-term cash obligations.

Long-term Trends

Analysis of Short-term (Operating) Activity Ratios

Evaluates revenues and output generated by the Target Corp. assets. Operating performance ratios describe the relationship between the Target Corp. level of operations and the assets needed to sustain operating activities.

Analysis of Profitability Ratios

Measures the income of Target Corp. relative to its revenues and invested capital.

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Target Corp. common stock issue as the present value of all future dividends.

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data

The liabilities and stockholders’ equity reports major classes and amounts of external claims on assets and owners’ capital contributions, and other internally generated sources of capital.

Income Statement

The income statement (statement of earnings) reports on the performance of Target Corp., the result of its operating activities.

Enterprise Value (EV)

Enterprise value is total company value (the market value of common equity, debt, and preferred equity) minus the value of cash and short-term investments.

Cash Flow Statement
Quarterly Data

The cash flow statement provides information about Target Corp. cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on Target Corp. balance sheet.