How to Analyze an Income Statement Like a Hedge Fund Analyst

[@InvestorCenter]

If you are interested in downloading the spreadsheets I used to analyze stocks, you can download them here: www.patreon.com/user?u=38414104

[@InvestorCenter]

@ehvio the second and third tier

[@user-ph1ui9jg6d]

Hiya - this was very insightful. Do I need to sign up to Investor Center to access your spreadsheets. Furthermore, can you please make a video about how to determine growth percentage when forecasting metrics such as revenue or costs?

[@InvestorCenter]

@@user-ph1ui9jg6d yes. I’m going to post all of my spreadsheets that accompany my videos to the patreon. In terms of the growth rates, I’m working on a video for that!

[@user-ph1ui9jg6d]

@@InvestorCenter Thanks so much for your response. is there any other way of staying in touch for example: linkedin or instagram or is youtube the best way?

[@InvestorCenter]

@@thor4379 that’s the next video I’m releasing. Watch it on Monday :)

[@joealtamuro]

You mentioned early in the video that you didn’t know why companies would close their books in September instead of December. It’s usually due to “seasonality”, when sales are at their lowest in the year coming off of the summer months. Therefore Net Working Capital [NWC (= Inventories + Receivables - Payables +/- Net Accruals)] should be at its lowest in September. Don’t forget Apple usually releases new products in the 4th quarter so inventory levels should be at their lowest at the end of September. By Closing the books when NWC is at its lowest, Capital employed will also be at its lowest. This will maximize ROCE. Also, it’s just best to close in the quarter with the slowest activity so as not to distract the company from the busy holiday season. Most retailers also operate in this fashion.

[@InvestorCenter]

Wow! That is very interesting. And it makes sense that most of the companies I see with a September year end are retailers

[@indranilsinha4899]

wow ..great insight ! thanks a ton ! How about Microsoft it closes in Jun ??

[@joealtamuro]

@@InvestorCenter Thank you and I just want to say that your videos are excellent!

[@BradDietz]

Most retailers (not Apple) end their FY at end of January. Very few end in December because there is too much Y/Y noise due to calendar shifts. This is also where you squeeze in a 53rd week every 6-7 years.

[@gauravthadanii]

can you explain in a little more detail, how the capital employed would be at the lowest at sept?

[@kakivincent7941]

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[@katherinajohan3319]

It's really profiting I started with 30k dollars trading with a professional broker my colleague recommended to me to Mr Sam Deymon, and now I earn more than my monthly paycheck.

[@andrewryan1223]

Nearly half of millennial millionaires have at least 25% of their wealth in cryptocurrencies, according to the CNBC Millionaire Survey. In the coming years, the key to attracting the next generation of wealthy clients could be more about crypto than traditional stocks, bonds, private equity and hedge funds.

[@TELEG_-_nasirmustafar]

I'm interested to take part. Plz how may I be able to reach out to Mr Sam Deymon

[@gayanaehsan8158]

I also started with 6000£ last month and my portfolio has grown tremendously to what I can't imagine.

[@samman5395]

Your videos like this are so much better than anything else on KZbin. Please make videos about how to analyze the cash flow statement and balance sheet please!

[@InvestorCenter]

Thank you, I really appreciate the kind words!

[@peteryusufov7589]

Yes, please do make the videos you mentioned in the end of this one!

[@althe]

Gotta say, your videos and explanations and graphics and topic choices are way superior to everything else (in this genre) on KZbin.

[@jamieamato560]

I'm only halfway through the video and I just have to say your explanations are by far the best I have heard so far. I've been researching how to analyse companies for investment for months, it's been slow progress. Although I was familiar with most of the terms you were speaking about, my understanding of them just trippled thanks to your breakdown of each of them. Thankyou so much I will now prioritize this chanel first, amazing video 😄

[@ftnavy123]

This is one of the best videos I've ever watched on income statements and really filled a lot of gaps I had in my knowledge of why I should care about different items. I would LOVE to see you do a DCF video.

[@InvestorCenter]

Thank you, Josh!!!

[@Chartmaster2099]

Great, great presentation, I really enjoyed the way you showed how to make a discounted cash flow model in a simple and objective way. I'm studying valuation, but it's really hard to find practical content online, it would be awesome to see a whole series on how to make a proper valuation of a stock and how to read all the three key financial statements (Balance sheets, Cash flow and Income Statement) and how to use the financial ratios (PE, Price to book... ) with a detailed breakdown of each one.

[@gt3rsm3plz83]

Thank you for making this. You have a great narrating voice. Very easy to understand.

[@BSI_Inc.]

Thanks so much for this video. I hope you also teach us how to analyse balance sheets and cash flow statements and the financial model too coz I personally am still unclear about that

[@InvestorCenter]

I’m working on those videos now! Thanks for the comment, Allen

[@BSI_Inc.]

@@InvestorCenter looking forward to it!😁✌🏾

[@Shazam_575]

I'm currently doing my CA(SA) articles at Deloitte and just finished writing my CFA level 2 exam and I'm honestly so impressed with this video. I did a 4 year degree specializing in finance with accounting and can confirm that this video explains everything in the SOCI (Newish name for Income Statement as per IFRS) so clearly and concisely. You definitely got a new subscriber!

[@jclopez99]

Excellent series of videos. And, yes! Please do a DCF Valuation video. This would be very insightful.

[@meshari.alswainie]

Many thanks to your professional analysis- Meshari from Saudi Arabia

[@mariecamero]

I'm a beginner and slowly trying to learn how to analyze financial statements. You mentioned the basic financial model you created and yes please cover it in another video. If there is already, I apologize and I will watch it after this video.

[@luxurylife7464]

Your videos are wonderfully put together. I would greatly appreciate if you do a DCF model video in the future. You explain things with great ease and would be helpful to understand your view point on discounting cash flows. Thank you and keep up the great work!

[@profit_paradox]

Would love to see a video that covers the projections for DCF valuation which is ultimately used to determine if a stock is undervalued!! Very helpful

[@malikdey-nativemoor2923]

Discounted Cash Flow Evaluation would be so helpful if we were explained in detail. What an amazing channel. Just found this channel looking for how buffet calculates intrinsic value and what a library of information, I stumbled across. Thank You! Investor Center, for delivering amazing Content and great VALUE!

[@Nic-xr1og]

For anyone reading later on- some companies don’t align to calendar year if they follow set 4-5 week periods for better comparison to other periods. This is common in manufacturing. I’m sure there are other reasons as well.

[@MI-kn3id]

Love the idea behind this video and how you kept it simple. Can you go over projections in a separate video we’re you give a few examples /repetitive so it will the process”sinks in” and we can better apply it to different companies/modules. Thank you.

[@magdalena2115]

wow their operating income in 2021 is insane yoy. jumping from 57 to 94 BB is nuts! and their expenses weren't much different compared to previous COGS and operating expensese relaative to revenue. What a a great year for them

[@John414]

Terrific video on how to analyze the important information ℹ️

[@amossenkao385]

Thanks for the great explanation. Can't wait for the ones of balance sheet and cash flow!

[@PeakperformerEmil]

I have a comment for 6:00 - 7:00: The margins of the products and services are actually really important and I personally have never payed attention to them. From now on I will. They are so important because you can see what position you want the company to be scaling. Therefore it would have been nice if you did show how to calculate it. For those who dind't understand, it goes like this: (Service revenue - Cost of service)/Service revenue = Service gross margine. And further down the line, comapnies can't scale their Gross Margines for ever, that's why you actually can't expect them to be scaling and scaling and scaling, because it's unlikely going to happen. But they defenitely should keep at least a stable Gross margine which is somewhat high. At least that's my point of view. Great video, I love it. Lovely greetings from germany

[@erickgomez8758]

Would love to see the DCF valuation video!!!! You break things down perfectly and thank you for taking the time and effort of creating these presentations.

[@rosalieroku3818]

Excellent presentation. I understand this better now. Yes, more on your spreadsheet please.

[@TheKerth]

The reason why some companies report its financial statements not on the year end it is because they report their FS when the company is on slack season which means movement of assets are very slow, in which the management believe it would capture or would be more representative of the company financial position

[@InvestorCenter]

Very helpful! Thank you!

[@andredantu6664]

Hi, @investorcentre just watched this video and wanted to say thank you. It was an excellent overview of an income statement. I have not seen your videos before, but I have subscribed now. Thank you.

[@InvestorCenter]

Welcome to the channel :)

[@ADITYASHARMA-xp3sv]

i came looking at bill ackman's photo(possible click bait) but boy oh boy the content - spot on. Great job

[@Toys4Life]

I needed this - thank you!

[@lukeallen282]

Thank you for your video! Please also prepare a video on discounted cash flow analysis to determine if the stock is undervalued.

[@InvestorCenter]

Hey Luke, thanks for the kind words! I will be coming out with that video!

[@lukeallen282]

@@InvestorCenter looking forward to it!

[@matthines4507]

Great video, I am very interested in how you set up the income statement for predicting the future performance of the company. I would love a video on how you set that up and as you mentioned deriving the cash flows from that. Thanks

[@eFFecTM]

Great video! I came across your channel today and started watching many of your videos while taking notes. I love how detailed you explain things still while trying to keep the overall video compact. I would be very interested to see a video from you on discounted cash flow valuation. Also, happy new year!

[@eFFecTM]

Oh wait, you have made a video on this topic before in September.

[@InvestorCenter]

Happy new year! I will do a more detailed video on discounted cash flow valuation!

[@WDWysong]

Wow...outstanding, clear explanation...very helpful. Thank you.

[@InvestorCenter]

I’m glad it was helpful!

[@jwia007]

Please teach us more. This is awesome

[@aroaris843]

Great and simple. While others try to make difficult to understand content yours was very fluid and amazing !

[@InvestorCenter]

Thank you! I really appreciate that

[@lorenvillaverde2564]

I commend the video for comprehensively presenting the idea that Accounting students learn in Financial Analysis!

[@sev7ncapitall]

Fantastic video! I love how clearly and thoroughly you present information. You may want to look into teaching, consulting, or creating a course.

[@InvestorCenter]

I’m thinking about creating a course!

[@monnombre6547]

thank you! you do a very great job simplifying the terminology & explaining...what about a "how to analyze" cash flow statement & balance sheet ?

[@InvestorCenter]

I’m working on those videos now!

[@ramsondave6915]

Mrs sonia is legit and her method works like magic I keep on earning every single week with her new strategy

[@joellefletcher6180]

Wow I' m just shock someone mentioned expert Mrs Sonia I thought I'm the only one trading with her

[@joellefletcher6180]

She helped me recover what I lost trying to trade my self

[@raymondcash8816]

Mrs sonia has changed my financial status for the best all thanks to my aunty who introduced her to me

[@marrysalah1398]

Who's this professional everyone is talking about I always see her post on top comment on every KZbin video I watched

[@marrysalah1398]

I think I'm interested how can I get in touch with Mrs Sonia

[@anandpatel2624]

This is a great explanation and one very important. Thank you so much. Could you please do one for the DCF?

[@izaactorres5741]

Definitely want to see you breaking down discounted cash flow

[@trentonbillie7]

Thanks for the vids… learning a lot!!

[@InvestorCenter]

Thank you! Glad they are helpful :)

[@georgewyatt2924]

Very good job of explaining these items. Thank you.

[@NattSiroj]

Great explanation Would love to see additional video on DCF valuation. Cheers

[@meheh002]

I'm bumping this up!

[@danbuild977]

Just what I needed. Thank you so much for this video.

[@isidorocn7982]

This video has been super useful, thanks! And it would be great if you could do another video on estimating future earnings from the income statement. Thanks!

[@JedWunderli]

Love your channel. I'd love to see the video that you talked about doing at the end of this one. I think that would be very useful. Thanks for your time and effort.

[@michaelflynn1617]

Please do make a DCF video. All of your explanations have been so very helpful and DCF video would really put it all together ❤

[@aggariba]

love the way you explain, thanks

[@chrischoi4484]

Really clear and well made video. I look forward to your future content!

[@InvestorCenter]

Thank you, Chris! I look forward to your future comments on future content!

[@livingingreenvillenc6904]

This was great! Thank you for sharing this

[@eRaZerrOfficial]

Would be awesome if you could do a "How to analyze a 10k". Great work, really

[@InvestorCenter]

Thank you! I may make that video!

[@1013eden]

Great video we need more contentl ike this and please do a video on projection

[@ИльяЛыков-о2ш]

Thank you very much for your job! It`s super useful and very very interesting, can`t wair for your nex video about financial models!😀

[@InvestorCenter]

Thank you for watching! Stay tuned for that video :)

[@justducky8508]

Yes please make a separate video discussing under valued stocks

[@Internetjim1235]

Really good presentation- keep them coming

[@InvestorCenter]

Thank you!

[@GregKealey]

This is quickly becoming my favourite channel :)

[@InvestorCenter]

Hey Gregory! That is great to hear. Appreciate the support!

[@lonniehardy3985]

The different fiscal year end dates are caused by the company's adoption of four periods per year consisting of 13 weeks each. Notice each of the four periods end on a saturday. This method causes each of your quarterly reports to contain the same number of weeks (13) and each of your fiscal years to contain exactly 52 weeks. It makes accounting a little more complex but yields exact comparability. Sometimes an accountants nightmare, but worth it in the long run.

[@InvestorCenter]

Interesting! Thank you, Lonnie

[@Khurram-zp8gl]

Thanks a lot.pls also cover some topic to estimate intrinsic value of the company.

[@domceja62]

Great video! Very clear and concise!

[@InvestorCenter]

Thank you, Dom!

[@InvestorPro7]

This video is a complete guide and I really liked it. There is always something to learn in your videos.

[@InvestorCenter]

Glad you enjoyed the video!

[@Honch79]

So well explained, thank you - keep making the videos 🙏

[@davidwestenburg9165]

Geat stuff so far!

[@minipwn0422]

I work in corporate accounting for a publicly traded firm and we have our fiscal year end in October because we would struggle to get everything done with the holiday calendar in December and January

[@ron403b]

I would be interested in learning about the discounted cash flow evaluation.

[@InvestorCenter]

I’m working on that video!

[@annasillanpaa1111]

The calendar year reporting relates to when the company was established, otherwise the first reporting would be for 6 months and 21 days or what ever which would be difficult to compare to the next ones.

[@javieralessandro8850]

Great video!!! Thanks for share!!!

[@TT-mg3yu]

Not everyone can teach like this. Hats off mam.

[@emmanuelgoutonde8216]

Very useful video, Thanks for your hard work!

[@alejandrovarona1309]

Congratulations, you do an excelent work. Please do the discounted cash flow video valuation. I am eager to see it!

[@TheRustyLM]

Thank you Thank you Thank you 🙏

[@InvestorCenter]

You’re welcome You’re welcome You’re welcome 😊

[@rafaelageyev9961]

I think everyone would love to see you do a DCF model!!!

[@InvestorCenter]

Thank you!!! Maybe I will put the video out soon :)

[@alexandermaseka6463]

thank you: this is gold right here

[@InvestorCenter]

Thanks for the kind words Alexander!

[@yazmut]

so well explained, thank you for the edu

[@davidschroeder3580]

very informative and like the way you broke it down

[@InvestorCenter]

Thank you, David! Glad you found the video informative

[@awababd-arrahman3104]

Thanks, lot for your deep work. Can you tell me "For how long should I analyze these statements"? last 4 quarters or last 10 years

[@aishwaryakochar3334]

Totally amazing. You kept the information and time both concise and useful. Could you also upload the DCF video which you mentioned?

[@julienthefirst9151]

You have a beautiful voice! And good content too :)

[@domceja62]

Can you please make a video on how to calculate the discounted cash flow evaluation to find intrinsic value?

[@dakotafleming5261]

Thanks for the great content! Can you do a video about arriving at EBITDA and utilizing industry multiples?

[@josekuoman3006]

it will be great if you can do a discounted cash flow evaluation

[@thefrugallifehacker1225]

I would be very interested in viewing how you complete the DCF model for stock analysis. Where do you pull your data from.

[@Rarealt]

Bloomberg for foundational framework & then pull data from other providers as well.

[@mpsanish]

You’ll need to also make some solid assumptions and forecast. Be sure to look at how the market factors and bake them into ur assumptions.

[@mda0214]

Lol don't listen to the comments posted. This is like a crash course. There's a lot more information you can get from a companies financials. I would recommend taking an online class in accounting at a college. Its a couple thousand max. But you'll make it back fast.

[@prabhuverma322]

hey i like your content, would you mind sharing how you prepare spreadsheet in detail?

[@marvinschnee5574]

Great job very informative

[@shubhamtailang2184]

That was a wonderful explanation in laymen language. If you can explain DCF in detail and simple language that will be great. Thanks

[@jrums]

Awesome explanation, clear and straightforward. Thank you!

[@kevinpascall299]

So clear and very easy to digest. Thank you sooooo very much. - from a non-Accounting, budding investor.

[@InvestorCenter]

Glad it was helpful! I enjoy being able to help :)

[@elpapasongote]

This is great! Thanks!!!

[@InvestorCenter]

Glad you enjoyed it!

[@msaylorBTC100M]

please make a video on how to analyze start up companies during pitch meetings... I am starting a VC

[@InvestorCenter]

What is your background? How were you able to start a VC and raise money from investors?

[@msaylorBTC100M]

@@InvestorCenter Project Management, money came from trust fund

[@InvestorCenter]

@@msaylorBTC100M email me: [e-mail] , would love to connect and see how I can be helpful

[@jaysant6958]

In case anyone is wondering, “The difference between them [gross profit margin and operating profit margin] is that gross profit margin only figures in the direct costs involved in production, while operating profit margin includes operating expenses like overhead.” From Investopedia.

[@flmjohn]

Great Video and presentation to understand the concept, could you please make a video to calculate share price basis income projections. Thanks

[@joelavoie9768]

Fantastic video, thank you for sharing! :)

[@SalonRougeAmir]

if you could please do so (dcf) in a separate video I would really be interested

[@HariKrishna-mi6is]

Wow. Super good 💕

[@2023Red]

super job!!!

[@InvestorCenter]

Thank you!!!

[@edcortes5764]

Well done.

[@InvestorCenter]

Glad you enjoyed the video, Ed

[@DreaminBig]

That was a really good tip. I’ve heard of comparing statements of a company to another that is in the same business. I didn’t know how. You said to compare YoY% and it’s such an obvious thing that I don’t mid my think of lol. Thank you

[@olaafolabi6015]

I enjoyed your video, and with your help, I can finally understand companies' income statements now.

[@InvestorCenter]

That is great to hear!

[@danny100d]

Thank you, again!

[@Allen-L-Canada]

I really like to learn about how to understand and interpret the financial statement and numbers in them. Please do more of this.

[@InvestorCenter]

More videos like this will be released!