Practical Finance Guides

Master financial analysis through step-by-step tutorials, real examples, and hands-on learning experiences designed for practical application.

Learn by Doing

Each guide walks you through real scenarios with detailed explanations. We believe the best way to understand financial concepts is through practical application rather than theory alone.

Difficulty Levels

Beginner - No prior experience needed

Intermediate - Basic knowledge helpful

Advanced - Professional application

Reading Cash Flow Statements Like a Pro

Beginner

Cash flow statements tell the real story behind company performance. While profit and loss statements can be manipulated through accounting methods, cash movements don't lie. This guide teaches you to spot red flags and identify healthy businesses.

1

Download sample statements

We'll start with three companies from different industries to see how cash patterns vary across sectors.
2

Identify the three sections

Operating, investing, and financing activities each tell different parts of the business story.
3

Calculate key ratios

Free cash flow, cash conversion cycles, and operating cash flow margins reveal financial health.

Spotting Creative Accounting Tricks

Intermediate

Companies sometimes present numbers in ways that look better than reality. This isn't always fraudulent - often it's perfectly legal creativity. But as an analyst, you need to see through the presentation to understand what's really happening.

1

Revenue recognition analysis

Learn to spot when companies accelerate sales or defer expenses to boost current period results.
2

Examine footnotes carefully

The most important information often hides in footnotes where companies explain their accounting choices.
3

Compare with industry norms

Unusual patterns become obvious when you benchmark against similar companies.

Advanced Analysis Techniques

Professional-grade methods used by investment analysts and financial consultants. These approaches require solid foundation knowledge but provide deeper insights into company performance and market positioning.

DuPont Framework

Break down return on equity into its component parts to understand what drives profitability. This method reveals whether high returns come from efficiency, leverage, or market position.

Profit margin decomposition
Asset turnover analysis
Equity multiplier evaluation
Trend analysis over 5-year periods

Altman Z-Score

Predict bankruptcy probability using five financial ratios. This classic formula has proven accurate for decades and remains relevant for risk assessment in modern markets.

Working capital calculations
Retained earnings analysis
EBIT evaluation methods
Market value considerations

Economic Value Added

Calculate true economic profit by adjusting for cost of capital. This approach helps determine whether companies actually create value for shareholders beyond what they could earn elsewhere.

WACC calculation methods
NOPAT adjustments
Invested capital determination
EVA trend interpretation

Competitive Analysis

Position companies within their industry context using financial metrics. Understanding relative performance helps identify market leaders and potential disruption targets.

Peer group selection criteria
Benchmarking methodologies
Market share correlation
Competitive moat assessment