S2O Stock Analyzer Tutorials: Financial Statements

type: video (mp4); length: 5:10; watch on YouTube.

Explains information presented in the Financial Statements section of the S2O Stock Analyzer: financial statements charts, absolute values and growth rates.


In this video I'm going to show you basic information available in the Financial statements section of the S2O Stock Analyzer.

Before we begin, as a reminder, Stock Analyzer is accessible to you on any page in any mode - to call it just click on the "SA" button in the main menu.

Now let's see what we have available for Apple. I click the "SA" button, type AAPL and press "enter".

Important Characteristics of a Stock

In the left section, under the button "Fin Statements" I can see a few important characteristics of a stock, without even clicking any other button, such as:

  • Earnings per share
  • Current Price per Earnings ratio (especially important if you are incorporating PE analysis into your strategy)
  • Book Value Per Share (BVPS)
  • Price to Book Value per share ratio - if you see that this ratio is below 1 or close to 1 this is a sign for a rare bargain! But we still have to analyze the stock before buying it! Of course.
  • And if the company is paying dividends you will see the dividend ratio and dividend yield here.
Annual and Quarterly Data Charts

Now, when I click on the "Fin Statements" button I can see that there are two charts shown. Both of them show data for Equity, Earnings per share, Sales and Cash and Long term debt. All these items are what we usually focus when first analyzing the financial health of a business. Long Term Debt is the only category we want to see going down and it is shown in red.

Please, notice that there are two types of values on the chart - absolute values (equity, sales and such) and "per share" values (earnings per share). Therefore there are two y-axes on the chart - the left one is for absolute values and the y-axe on the right is for "per share" values.

Just as in any other interactive chart on stock2own.com - thanks to HighCharts developers - you can point your mouse pointer to the legend of any chart and the corresponding line will be highlighted. You may also point to any day or line on the chart and an appropriate point will be highlighted and a small popup window will show the exact value of the highlighted point.

Sometimes you may want to see only "per share items" or sometimes charts get really bus and it is useful to be able to hide one or more lines from the chart. Nothing could be easier, just click on the line names you want to hide in the legend section at the very bottom and lines will be hidden. If you want to show hidden lines again, simply click on the line names one more time and they will show up.

The top chart shows annual data and could be used as a long term gauge. The second chart shows Quarterly Data and can be used to do a short term analysis. It makes sense to pay attention to the quarterly dynamics so I do not have to wait for the next yearly statement, so I definitely want to view quarterly data as part of my analysis.

Both charts give me quite a good understanding of the dynamics happening to the company. For instance, I can see that annual numbers for Apple are growing year over year and there is nothing I can see to worry about. But, the picture is a bit different on a quarterly chart - I can see that earnings per share was falling, sales and cash numbers declined - let me hide all other lines to highlight the problem...

Raw Data and Growth Rates

Now I do really want to understand what is going on there. The best place to start with is to check all other quarterly values available.

I can do it either by clicking on a corresponding link right above the chart. Or if I click on the "Quarterly Statements" button in the left side of the screen. (Use the "Annual Statements" button for annual statements).

As you can see it gives me plenty of data for analysis. It shows all kinds of data for the last 5 quarters (in case of annual statements there will be data for the last 10 years or as much as available). All items are grouped by the statement it was retrieved from. You can see here items from a Balance Sheet, Cash Flow Statement and Income Statement. Items shown on the charts and those that are included into the Growth Grade computation are highlighted.

For all items you can see here

  • an absolute value
  • quarter-over-quarter or year-over-year growth
  • a bar presenting current value

Those bar charts shall give you a sense of the change dynamic so you can focus first on those items that have a negative dynamic.

An Example

I always start with highlighted items, because they are the most important. Let's check what we have for Apple.

Equity - growing quarter after quarter, with the exception of the last quarter. Red flag! Cash from Operating Activity - there is a drop in the last quarter. And negative quarter-over-quarter number supports my chart. As expected, similar drop we can see for Free cash Flow... Sales... and correspondingly, earnings per share.

Of course, this is just a quick look at financial statements and we shall analyze all other items. However, for now, it seems that sales decrease could be a cause for all other negative things I can see on the chart.

Mobile View

Just one more thing to mention before we conclude this video.

The view with bar charts is not available in a "hard view" mode, which is the default mode for smart phones.

On a smart phone you will see annual and quarterly statements as a simple list. It will look just like this...

To get financial statements, click on "annual financial statements" or "quarterly financial statements" in the "Annual and Quarterly Data" section.

Of course, even on a smart phone, you can always switch between the two modes by clicking on a corresponding button at the right of the header of the page.