Fundamental Analysis · InvestSkill

This skill has been merged into stock-eval. Use stock-eval for comprehensive fundamental + quality + valuation analysis.

Quick Reference — Key Ratios

Ratio	Formula	What It Measures
P/E (Price-to-Earnings)	Market Price / EPS	How much investors pay per dollar of earnings; compare to peers and history
P/B (Price-to-Book)	Market Price / Book Value per Share	Premium over net asset value; useful for financials and asset-heavy businesses
P/S (Price-to-Sales)	Market Cap / Revenue	Valuation relative to revenue; useful when earnings are negative or depressed
EV/EBITDA	Enterprise Value / EBITDA	Capital-structure-neutral earnings multiple; standard M&A and cross-sector benchmark
ROE (Return on Equity)	Net Income / Shareholders’ Equity	Profitability relative to equity book value; decompose with DuPont for quality assessment
ROIC (Return on Invested Capital)	NOPAT / Invested Capital	True economic return on all capital deployed; compare to WACC to assess value creation
Current Ratio	Current Assets / Current Liabilities	Short-term liquidity; >1.5x generally healthy; <1.0x signals potential liquidity stress
D/E (Debt-to-Equity)	Total Debt / Shareholders’ Equity	Financial leverage; higher ratio = more risk but also more return amplification

For the full analysis framework — income statement line-item breakdown, working capital cycle, DuPont decomposition, cash conversion cycle, Porter’s Five Forces, Piotroski F-Score, DCF, ROIC/WACC, and risk matrix — use stock-eval.

Thesis Invalidation

After delivering the analysis signal, specify what would reverse it:

If signal is BULLISH — thesis breaks if:

revenue growth decelerates below 5% for 2 consecutive quarters AND gross margin contracts >200bps
[One or two more triggers drawn from this analysis’s own drivers, each with a threshold]

If signal is BEARISH — thesis breaks if:

revenue reaccelerates >15% AND margin expansion resumes
[One or two more triggers drawn from this analysis’s own drivers, each with a threshold]

Re-run this analysis when:

[ ] Next earnings release
[ ] Price moves ±15% from current level
[ ] 60 days have elapsed
[ ] Material news event (acquisition, leadership change, regulatory decision)

Standard Signal Output

All analysis concludes with this standardized block:

In the output, the box below is followed immediately by this machine-readable footer — the same values as the box, filled in (no placeholders, no comments), so tools can read the result without parsing the box:

{"investskill": "1", "skill": "fundamental-analysis", "ticker": "<TICKER, or null for a portfolio / market-wide view>", "as_of": "<YYYY-MM-DD from Data & Sources>", "signal": "<BULLISH | NEUTRAL | BEARISH>", "confidence": "<HIGH | MEDIUM | LOW>", "horizon": "<SHORT-TERM | MEDIUM-TERM | LONG-TERM>", "score": 0.0, "action": "<BUY | HOLD | SELL>", "conviction": "<STRONG | MODERATE | WEAK>", "retrieval": "<pasted by user | web/tool retrieval | model memory>", "sources": ["<each primary source, dated>"]}

╔══════════════════════════════════════════════╗
║              INVESTMENT SIGNAL               ║
╠══════════════════════════════════════════════╣
║ Signal:      BULLISH / NEUTRAL / BEARISH     ║
║ Confidence:  HIGH / MEDIUM / LOW             ║
║ Horizon:     SHORT / MEDIUM / LONG-TERM      ║
║ Score:       X.X / 10                        ║
╠══════════════════════════════════════════════╣
║ Action:      BUY / HOLD / SELL               ║
║ Conviction:  STRONG / MODERATE / WEAK        ║
╚══════════════════════════════════════════════╝

Disclaimer: Educational analysis only. Not financial advice.