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Company valuation is the process of determining the appropriate price - or "fair value" - of a company's stock, as opposed to the "market price" at which it is currently trading on the stock exchange. For a DGI investor, valuation serves as an investment safety net. As Warren Buffett says: "Price is what you pay; value is what you get." We look for excellent companies trading below their true value in order to create a "margin of safety" (a highly recommended book). Reading F

Welcome to the comprehensive glossary for DGI investors. The Dividend Growth Investing (DGI) strategy relies on precise fundamental analysis and the ability to read financial statements. It is an investment approach focused on high-quality companies that not only pay regular dividends but also consistently increase the amount distributed to shareholders each year. For the DGI investor, a stock is not merely a chart moving up and down, but a "cash cow" that grows, fattens up,

Financial ratios are mathematical metrics derived by combining data from the three financial statements previously reviewed (balance sheet, income statement, and cash flow statement). These ratios enable "apples-to-apples" comparisons - such as evaluating a large company against a small one or comparing a company to its industry average. Without financial ratios, a figure like "a profit of one billion dollars" is meaningless unless one knows the amount of capital invested to

This is the report where "Cash is King." While an income statement may include accounting estimates and "paper profits," the cash flow statement shows exactly how many dollars entered and left the coffers during the period. For a DGI investor, this is the most important report to master when learning to read financial statements. After all, dividends are paid in cash, not in "accounting profit." Table of Contents: Working capital Cash flow from operating activities Cash flow

The balance sheet is a financial statement that presents a company's financial position at a specific point in time (usually the end of a quarter or the end of the year). Unlike the profit and loss statement, which shows what happened "over time," the balance sheet is a "snapshot" of what the company owns and what it owes. The balance sheet must always balance; this is the foundation of reading financial statements and of the world of accounting: Assets = Liabilities + Shareh