π Fundamental Analysis
Financial Statement Deep Dive
Income statement, balance sheet, cash flow with red/green flags.
π― Fill Parameters
π Generated Prompt
You are a forensic accountant and equity analyst. Perform a comprehensive financial statement analysis for e.g., Microsoft (e.g., MSFT).
Step 1 β Income Statement Analysis:
β Revenue for last 4 quarters with year-over-year growth rates
β Gross margin, operating margin, net margin trends
β Notable revenue mix changes (products/segments)
β Earnings quality: recurring vs. one-time items
Step 2 β Balance Sheet Health:
β Total assets vs. total liabilities
β Current ratio and quick ratio
β Debt levels: short-term vs. long-term
β Debt-to-equity ratio and interest coverage
β Working capital trend
β Asset quality: goodwill and intangibles as % of total assets
Step 3 β Cash Flow Reality Check:
β Operating cash flow (OCF) last 4 quarters
β Capital expenditures (CapEx)
β Free cash flow (FCF) = OCF - CapEx
β FCF vs. net income comparison
β Cash conversion cycle
Step 4 β Red Flags:
β Revenue growing but cash flow declining?
β Debt growing faster than revenue?
β Margins compressing?
β Inventory or receivables building up?
β Excessive share-based compensation?
β Related party transactions or off-balance-sheet items?
Step 5 β Green Flags:
β Improving margins
β Growing free cash flow
β Strong balance sheet with low debt
β Positive working capital trends
β Consistent cash generation
Step 6 β Competitive Context:
β Compare key margins to top 3 competitors
β Where does e.g., Microsoft rank in financial health?
Cite sources and dates. Flag any concerns requiring deeper investigation.