Companies and valuation
Connect business performance, financial statements, expectations and stock prices.
Browse the full library →How Financial Statements Fit Together
The income statement reports operating results over a period, the balance sheet reports a financial position at a date, and the cash-flow statement explains movements in cash. Reading them together helps separate accounting profit, financing and actual cash movement.
Concept explained · BeginnerEarnings, EPS and Guidance
Earnings describe reported profit for a period. Earnings per share relates profit available to common shareholders to a share count. Guidance is management’s forward-looking outlook, not a reported result or a guarantee.
Concept explained · BeginnerWhy Stocks Can Fall After Good Earnings
A stock can fall after strong earnings because its price reflects expectations about the future, not just the reported quarter. Results, guidance, valuation and what investors had already anticipated can point in different directions.
Concept explained · BeginnerWhat Is a P/E Ratio?
The price-to-earnings ratio divides a share price by a stated earnings-per-share measure. It expresses how much market price corresponds to a unit of those earnings, but it does not establish fair value on its own.
Theory explained · IntermediateDiscounted Cash Flow Explained
Discounted cash flow estimates value by translating expected future cash flows into present value using a suitable discount rate. The calculation is conditional on forecasts, timing, risk and the kind of cash flow being valued.
Concept explained · BeginnerDividends and Total Return
A dividend is a distribution to shareholders, often in cash. Dividend yield relates a stated dividend amount to a share price. The distribution is one component of return and is not a guarantee of profit or future payments.