Thread by @LearnGrowInvest

✅How to Pick Great Stocks✅

We started a 4 part series on our YouTube channel showing how to identify great stocks for your portfolio.

Here is a recap of the session...

🧵

✅ Start with Fundamental Analysis

This is the use of Financial Statements, Economic Reports and Forecasts to evaluate a stock's potential. The goal is to examine the key drivers of a company's current and future business activities.

1/

✅ Review the Financial Statements (Quantitative Analysis)

Look at the measurable characteristics of a company. The main sources are the Balance Sheet, Income Statement and Cash Flow Statement

2/

✅ Examine the Balance Sheet

The Balance Sheet provides an overview of a company's assets, liabilities and stockholder's equity as a snapshot in time.

The Balance Sheet Formula:

Assets = Liabilities + Owner's Equity

3/

✅ Examine the Income Statement

The Income Statement provides an overview of Revenues, Expenses, Net Income and Earnings Per Share (EPS).

The Income Statement Formula

Net Income = Revenue - Expenses

4/

✅Follow the Cash

The Cash Flow Statement measures how well a company generates Cash to pay its debt obligations, fund its operations and investments. It complements the Balance Sheet and Income Statements.

5/

From this point we will look next week at assessing the performance of the company using Financial Ratios.

Until then catch the recap of the first meeting here: