Reading Financial Data - Step by Step

A short field guide for reading grepcent pages. Each lesson uses real public-source data already in the site.

Every worked example is generated from grepcent's current public-source data. When the data refreshes, the lesson numbers refresh with it.

Economic indicators

Read a macro series by looking at its latest observation, units, and source.

What is CPI? - CPI is an index that tracks prices for a broad consumer basket.
Reading the unemployment rate - The unemployment rate is a percent of the labor force.
The fed funds rate - The fed funds rate is a short-term interest-rate series.
The yield curve and the 10-year minus 2-year spread - A yield spread compares two interest rates by subtracting one from the other.
What GDP measures - Real GDP measures economy-wide output after adjusting for price changes.

Use SEC companyfacts to read revenue, margins, EPS, the balance sheet, and growth.

What is revenue? - Revenue is the top-line amount a company reports from its business activity.
Gross, operating, and net margin - Margins turn income-statement dollars into percentages of revenue.
What is EPS? - Diluted EPS is earnings per share after including dilutive shares.
Balance sheet basics - A balance sheet shows what a company owns, owes, and what remains for shareholders.
Revenue growth - Revenue growth compares one fiscal year with the immediately prior fiscal year.

Use 10-Ks, 10-Qs, MD&A, and thread pages as plain reading aids.

What is a 10-K vs. a 10-Q? - A 10-K is annual. A 10-Q is quarterly.
What is MD&A? - MD&A is management's discussion of financial condition and results of operations.
What are risk factors? - Risk factors are a filing section that names uncertainties the company discloses.
How a macro thread connects pages - A thread gathers a macro theme, mapped SIC sectors, company financials, and literal MD&A mentions.
Source links and as-of dates - Every reading should include where the number came from and when it was current.

Read cash generated by the business, cash returned to shareholders, and basic return ratios.

What is operating cash flow? - Operating cash flow is cash generated or used by the company's main operations.
What is free cash flow? - Free cash flow subtracts capital expenditures from operating cash flow.
Dividends and buybacks - Dividends and share buybacks are two separate cash outflow lines.
What is ROE? - ROE compares net income with stockholders' equity.
What is ROA? - ROA compares net income with total assets.
Reading leverage - Liabilities / equity compares what a company owes with owners' equity.
The current ratio - The current ratio compares current assets with current liabilities.

The same label can mean different things for a retailer, bank, REIT, or insurer.

Reading a bank - A bank's financial statements use the same page layout but different business economics.
Reading a REIT - A REIT owns or finances real estate, so its revenue is tied to property activity.
Reading an insurer - An insurer's statements combine insurance activity with a large investment balance sheet.