In investing, it is important to know what you own. This printable 14 page guide is essentially a step-by-step due diligence (DD) worksheet that I use to help myself determine if a company is a great long-term investment. This guide has helped me to really UNDERSTAND the companies that I choose to invest in. I am sharing it with the public in the hopes that it will also help you make more informed decisions on the companies that you choose to invest your hard earned money with.
Covered in the Guide:
- A step-by-step walkthrough of each financial statement (Income Statement, Balance Sheet, Cash Flow Statement) and how to pull the most important information out of them. Once you have that information, I explain how you can use it to make well informed decisions about the company's future and determine if they'll make you $$$ in the long run.
- I teach you how to extract crucial information from other important elements of a company's 10K that are not the financial statements, like the Business, Risk Factor, and MD&A sections.
- Helpful resources to find key information related to a company's finances and identify their competitors.
- Key terms and what they mean for you as an investor.
- Important ratios, to include how to calculate them and why they are important for long term investment decision-making. I also a provide benchmarks for key ratios to help you understand what a company with strong financials should have.
- This guide is great for long term investors, but this guide may not be as helpful for speculation stocks like those traded on the OTC Market. If you are a penny stock player, this guide can still help you do DD on your company, but most OTC penny stocks don't have strong financials and analyzing a company's finances to determine if that company has value, is the primary purpose of my guide. In other words, after completing my steps-by-step worksheet, you would realize that most OTC stocks would end up with a Don't Buy recommendation.
DISCLAIMER: I am not a financial advisor. This guide is for educational purposes and is only intended to aid you in learning about how to perform basic due diligence on a company. While this guide helps to provide a solid understanding of how to perform due diligence, it is not all encompassing, and you should always seek more information to help you make sound investment decisions. It strictly serves to better help you understand the company or companies you are considering investing in. Before investing, you should always talk to a financial advisor to determine what is best for you.