20 Balance Sheet Ratios for Fundamental Analysis

We go through 20 must know balance sheet ratios.

Each one of these ratios should be in your arsenal for any fundamental analysis and interpretation.

Understand how topics like solvency ratios, Cash Conversion Cycle, and Debt-Equity ratios play a role in determining the health of a business.

Best Free Stock Portfolio Tracking Spreadsheet

Changes in Working Capital, Owner Earnings and FCF

A breakdown of changes in working capital. How Buffett defines it and how to use it for valuation. Includes a free spreadsheet download to complement the article.

7 Cash Flow Ratios Every Investor Should Know

A list of ratios based on the cash flow statement that every value investor should know. Combine with the balance sheet ratios for power fundamental analysis.

How to Value Stocks with the Ben Graham Formula

Learn how to value stocks using a simple formula created by Ben Graham. A quick way to estimate the range of a stock for value investors using growth numbers. Download the companion Graham formula spreadsheet.

Does the Magic Formula Work?

Joel Greenblatt created and wrote about the legendary Magic Formula. Here's our independent research to test verify whether the Magic Formula works in this day and age. The results will surprise you.

How Warren Buffett Interprets Financial Statements

A guide to understand and interpret the financial statements. Discusses how Warren Buffett uses it to identify stocks and moats. Refer to the table at the end that summarizes the entire discussion.

20 Balance Sheet Ratios Every Investor Must Know

There’s only one reason why I continue to hold the majority of my portfolio in US stocks.

Reporting and transparency requirements by the SEC rocks.

Without it, calculating the below balance sheet ratios would be a nightmare.

The following list of ratios can be applied to both the public and private sector. At Old School Value, we apply these ratios to help discover undervalued stocks to invest in. It makes a big impact by helping you avoid falling knives and value traps.

Here we go.

Let’s get straight into the 20 balance sheet ratios to help you determine the financial health of a company.

Product News: 2 Majestic Screener Updates

Screen using Fair Value and Margin of Safety

I was against it, but many of you wanted it.

My reason against screening using margin of safety or valuation still stands.

It should be part of the qualitative process, not the quantitative.

I still firmly believe you’ll grab onto too many value traps so proceed with caution and always remember that the default numbers are not 100% reflective of company’s current state.

Watch this short 2 min video of how it works.

Old School Curated Links and News (Feb. 13th Edition)

This week’s reading list is packed.

When stocks are mentioned in articles or newsletters, I like to check it first against the Action Score and start from there. An easy way to decide whether to investigate further or not.

Stocks mentioned in the articles: FL, AXTA, CATM, CMG

Does it Pass the Sniff Test?

A quick way is to first eliminate a lot of the junk out there with a sniff test.

A sniff test is the same as a simple checklist.

The purpose is to build guardrails so that you don’t step into dangerous territory.

It doesn’t work out as well because value investors get attracted to cheap stuff and growth investors get attracted to charismatic managers and glamour stories.

19 Biases Causing You to Look Foolish and Make Bad Decisions

If you invest, you have one goal in mind.

For your investments to be profitable.

What you and I can also agree on is that we don’t like being fooled by ourselves or others. We certainly don’t want to make bad decisions.

But we do it all the time.

Over and over again.

And many people refuse to do anything about it.

Product Update: Customizing the Screener to Your Needs

Ahoy!

We’ve released a highly requested feature to the Old School Value Online Screener to make it even easier on your workflow.
You want to be able to view data that you prefer instead of having to stick with the default settings or whatever I set as the default list.

Currently there are 9 different results settings to view the stocks that show up in the screener. But not a fully customizable feature.

Most likely, the data you want to see is different to the next person.

How to Value a Stock with the Benjamin Graham Formula

Learn how to value stocks using a simple formula created by Ben Graham. A quick way to estimate the range of a stock for value investors using growth numbers. Download the companion Graham formula spreadsheet.

## Free resources to discover

Download 3 free stock calculator spreadsheets following the methods we use for our DCF, Grahams Formula and DuPont Analysis.

Understand the value of a stock as well as a deeper dive into how ROE is calculated.

Download a PDF of an independent study performed to validate and evaluate the performance of our Action Score Stock Grading and Valuation tool. Statiscal data with easy to understand explanations on how to interpret the data. See how the stock grading system works and leverage the work to pick winning stocks.

See how you can leverage the Old School Value stock grading and valuation tool to achieve market beating returns to generate a bigger portfolio. We disclose the 2016 performance and disclose how to piggyback our proven scoring and ratings system.

Enjoy our various list of value focused, free pre-defined stock screens.

Based on the ideas of Graham, Buffett, Greenblatt and other strategies.

Updated weekly.

A recommended reading list for anyone interested in fundamental analysis and value investing.

Each book is categorized into difficult.

9 value investing blogs that we highly recommend.

Excellent quality with a focus on education.

If you are running low on ideas of want to jumpstart your idea brain, check out these sites.

We have collected the best sites that offer quality stock ideas without any sales or being pushy.

From books, to websites, to podcasts, newsletters and more, we list the 60 best investing resources related to value investing you would be crazy to miss.

## Ready to try Old School Value?

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