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Day 14 of 30 · 20 min

Week 2 review and a guided stock-analysis exercise

By the end of this lesson you can
  • Review week 2
  • Analyse a real stock step by step in VEXA
  • Write a balanced summary with both sides

Week 2 in one page

Income statements show revenue, costs and profit; balance sheets show what a company owns and owes; cash flow shows whether profit turns into cash. P/E and other ratios compare price with fundamentals. Charts and indicators describe how the price has behaved.

A guided analysis

Open any well-known company in Stock Analysis and work through five questions. Business: what does it sell, and to whom? Growth: is revenue growing, and is earnings growth keeping up? Health: is free cash flow positive, and how heavy is the debt?

Valuation: how does its P/E compare with peers and with its growth? Price behaviour: what are the trend and volatility, and how did it do versus the S&P 500 over the past year?

Then read VEXA’s ‘Why this VEXA Score?’ panel and compare its listed factors with your own notes. Where do you agree, and what does the score leave out?

Write both sides

Good analysis lists what could go right and what could go wrong. If you can only think of reasons to buy, you have not finished the research.

Try it in VEXA
Do the guided analysis on any stock →
Real data, so the numbers will differ from the lesson’s examples.

Key terms

Peer comparison
Comparing a company’s numbers with similar companies in the same industry.
Bull case / bear case
The best reasonable argument for a stock rising, and for it falling.
Full glossary →
Knowledge check · 6 questions
1Net income $120M, 40M shares, share price $60. What is the P/E?
2Which statement best reflects financial health?
3Gross margin fell from 45% to 38% over two years. What might it suggest?
4RSI is 78 and the stock is far above its 50-day average. What is the most accurate conclusion?
5A company reports a profit but negative operating cash flow for two years. What should you check?
6Why write a bear case even for a stock you like?
Try it

Complete the five-question analysis for one company and save it as a journal note in the Paper Challenge.

Key takeaways

  • Analyse business, growth, health, valuation and price behaviour.
  • Compare with peers and with the market.
  • Always write the bear case.
  • Treat any score, including VEXA’s, as one input.