Course
Reading a Company
From what a share actually is to what the statements actually say.
Beginner5 lessonsabout 32 minContent checked
The ground floor. What you own when you own a share, what you are paying for it, how the business earns, whether the balance sheet can survive a bad year, and how to tell growth from momentum. Every later course assumes these five lessons.
Module 1 — First Principles
Module 2 — the Numbers
- 2. Valuation ratios — what you are payingP/E, EV/EBIT, free-cash-flow yield and book-to-market answer one question in four ways - how much are you paying for each dollar of what the business produces?7 min
- 3. Profitability and returns on capitalMargins tell you what the business keeps from a sale; returns on capital tell you what it earns on the money tied up in it. The second is the one that compounds.7 min
- 4. Balance-sheet health and survivalSafety metrics ask one question - can this company keep its promises in a bad year? Interest coverage, leverage, liquidity and earnings quality are the four ways of asking it.7 min
- 5. Growth and momentum are not the same thingGrowth is what the business did; momentum is what the stock did. Pythia scores them in separate pillars so a good company in a drawdown is not mislabelled as a bad one.7 min