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spine .76”Business & Economics/Personal Finance/Investingg Easier!Making EverythinIt’s more important than ever for investors to know the truefinancial stability of a business. Whether you’re a seasonedinvestor or just want to learn how to make more intelligentand prudent investment decisions, this no-nonsenseguide gives you practical tips, tricks, and secrets for usingfundamental analysis to manage your portfolio andenhance your current system of selecting stocks! What is fundamental analysis and why should you use it? —understand who should use fundamental analysis, how you canuse it, and get up-to-speed on why it gives investors an edge How to perform fundamental analysis — get practical guidanceon how to perform fundamental analysis to analyze andmeasure a company’s profitability, financial resources, cashflow, and more Looking for fundamental reasons to buy or sell — find out how tolook for buy or sell signalsOpen the book and find: What to always look for whenstudying a company Tips to determine if a company’scredit standing is in jeopardy Real examples of howfundamental analysis unearthedsecrets investors wanted to know Online tools to make analysiseasier A checklist of things to consider inevery annual report Advice on how a good company ina bad industry can still make youmoney Why trends are important toinvestors Making money from fundamental analysis — learn how to paythe right price for a stock and get tips on how an annual reportcan be used to find out what a company is worth to you Getting advanced with fundamental analysis — get tips onhow digging into the industry’s fundamentals, finding trends,recognizing red flags, and technical analysis keeps investors atthe top of their gameFundamental AnalysisThe easy way to analyzeinvestments and industries! latneFundamsisylanALearn to: Assess the future value of a businessGo to Dummies.com for videos, step-by-step photos,how-to articles, or to shop! Evaluate internal management Gauge a company’s performanceagainst its competitors Make informed investments in bothbear and bull markets 24.99 US / 29.99 CN / 16.99 UKMatt Krantz is a writer and reporter for the Money section of USA Todayand USAToday.com, where he covers investments and financial markets.He also writes a daily column for USAToday.com, “Ask Matt,” which answersreaders’ investment questions. The author of Investing Online For Dummies,Krantz has appeared on Nightly Business Report and FOX Business.ISBN 978-0-470-50645-5Matt KrantzKrantzFinancial Markets Reporter, USA Today

spine .76”Get More and Do More at Dummies.com Start with FREE Cheat SheetsCheat Sheets include Checklists Charts Common Instructions And Other Good Stuff!To access the Cheat Sheet created specifically for this book, go t Smart at Dummies.comDummies.com makes your life easier with 1,000sof answers on everything from removing wallpaperto using the latest version of Windows.Check out our Videos Illustrated Articles Step-by-Step InstructionsPlus, each month you can win valuable prizes by enteringour Dummies.com sweepstakes. *Want a weekly dose of Dummies? Sign up for Newsletters on Digital Photography Microsoft Windows & Office Personal Finance & Investing Health & Wellness Computing, iPods & Cell Phones eBay Internet Food, Home & GardenFind out “HOW” at Dummies.com*Sweepstakes not currently available in all countries; visit Dummies.com for official rules.

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FundamentalAnalysisFORDUMmIES‰by Matt Krantz01 506455-ffirs.indd iii9/24/09 10:01:33 PM

Fundamental Analysis For Dummies Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.comCopyright 2010 by Wiley Publishing, Inc., Indianapolis, IndianaPublished by Wiley Publishing, Inc., Indianapolis, IndianaPublished simultaneously in CanadaNo part of this publication may be reproduced, stored in a retrieval system or transmitted in any form orby any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior writtenpermission of the Publisher, or authorization through payment of the appropriate per-copy fee to theCopyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600.Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley& Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for theRest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, Making EverythingEasier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission.All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associatedwith any product or vendor mentioned in this book.LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NOREPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OFTHE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BECREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIESCONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THEUNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OROTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OFA COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THEAUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCEOF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSESTHE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS ITMAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THISWORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN ANDWHEN IT IS READ.For general information on our other products and services, please contact our Customer CareDepartment within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.For technical support, please visit www.wiley.com/techsupport.Wiley also publishes its books in a variety of electronic formats. Some content that appears in print maynot be available in electronic books.Library of Congress Control Number: 2009936811ISBN: 978-0-470-50645-5Manufactured in the United States of America10 9 8 7 6 5 4 3 2 101 506455-ffirs.indd iv9/24/09 10:01:34 PM

About the AuthorMatt Krantz is a nationally known financial journalist who specializes in investing topics. Krantz has been a reporter and writer for USA TODAY since 1999.He covers financial markets and Wall Street, concentrating on developmentsaffecting individual investors and their portfolios. His stories routinely signaltrends investors can profit from and sound warnings about potential scamsand things investors should be aware of.In addition to covering markets for the print edition of USA TODAY, Mattwrites a daily online investing column called “Ask Matt,” which appears everytrading day at USATODAY.com. He tackles questions posed by the Web site’sgiant audience and answers them in a plain-English and straightforward way.Readers often tell Matt he’s the only one who has been able to finally solveinvesting questions they’ve sought answers to for years.Matt has been investing since the 1980s and has studied dozens of investmenttechniques while forming his own. Before joining USA TODAY, Matt workedas a business and technology reporter for Investor’s Business Daily and was aconsultant with Ernst & Young prior to that.He earned a bachelor’s degree in business administration at Miami Universityin Oxford, Ohio.Matt is based in USA TODAY’s Los Angeles bureau. When he’s not writinghe’s either spending time with his wife and young daughter, running, mountain biking, or surfing.01 506455-ffirs.indd v9/24/09 10:01:34 PM

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DedicationThis book is dedicated to my wife Nancy, who has helped me do my best, myparents for urging me to do my best, my grandparents for inspiring me to domy best, and my daughter Leilani for giving me a reason to do my best.Author’s AcknowledgmentsTaking on a project with the size and scope as this book would have beenoverwhelming without the help of key people along the way. My wife, Nancy,is always there ready with an encouraging pat or a suggestion for the perfectword that is eluding me. My assignment editor, David Craig, and other USATODAY editors have been supportive of my writing and journalism career fromthe start. Steve Minihan, a financial advisor and professor for UCLA Extension,has provided invaluable instruction and analysis skills. Fane Lozman sharedhis options expertise.The team at Wiley has also been very supportive, including: Acquisitions Editor,Erin Calligan Mooney; Project Editor, Jennifer Connolly; and Technical Reviewer,Paul Mladjenovic. And again, a big thanks to Matt Wagner, my literary agent, forletting me know about this opportunity.Finally, I wanted to thank my family for giving me the tools and determinationto pursue my interest in writing and investing. My mom and dad taught alltheir kids they could achieve their goals if they always did their best andnever stopped trying to get even better. And my grandparents are modelsof long-term success I continue to strive for.01 506455-ffirs.indd vii9/24/09 10:01:34 PM

Publisher’s AcknowledgmentsWe’re proud of this book; please send us your comments at http://dummies.custhelp.com. Forother comments, please contact our Customer Care Department within the U.S. at 877-762-2974,outside the U.S. at 317-572-3993, or fax 317-572-4002.Some of the people who helped bring this book to market include the following:Acquisitions, Editorial, and MediaDevelopmentComposition ServicesProject Editor: Jennifer ConnollyAcquisitions Editor: Stacy Kennedy andErin Calligan MooneyCopy Editor: Jennifer ConnollyProject Coordinator: Sheree MontgomeryLayout and Graphics: Ashley Chamberlain,Melissa K. Jester, Mark PintoProofreader: Jennifer TheriotIndexer: Infodex Indexing ServicesAssistant Editor: Erin Calligan MooneyEditorial Program Coordinator: Joe NiesenTechnical Editor: Paul MladjenovicEditorial Manager: Jennifer EhrlichEditorial Supervisor: Carmen KrikorianEditorial Assistant: Jennette ElNaggar andDavid LuttonCover Photos: iStockCartoons: Rich Tennant(www.the5thwave.com)Publishing and Editorial for Consumer DummiesDiane Graves Steele, Vice President and Publisher, Consumer DummiesKristin Ferguson-Wagstaffe, Product Development Director, Consumer DummiesEnsley Eikenburg, Associate Publisher, TravelKelly Regan, Editorial Director, TravelPublishing for Technology DummiesAndy Cummings, Vice President and Publisher, Dummies Technology/General UserComposition ServicesDebbie Stailey, Director of Composition Services01 506455-ffirs.indd viii9/24/09 10:01:34 PM