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In academic affiliation with Carnegie Mellon University
Institute of Algorithmic Tradingand Applied Computational Finance

Practitioner course in discretionary trading

Fundamental Analysis for Traders: Reading the Numbers

Fundamental analysis reads a company's accounts to judge what it is worth and how its results may move the share price. This course teaches the three financial statements, the main valuation ratios, earnings quality and guidance, and how traders use fundamentals to choose which stocks to trade and which events to respect.

Fundamental analysis asks what a business is worth and what its results will do to the share price. For a trader it answers practical questions: is this a company that can gap 20% on earnings, is its rally backed by rising profits, and is it cheap or expensive against its peers. This course teaches the accounts from the beginning and then puts them to work in a trading routine.

How do you read a company’s financial statements?

Start with the cash flow statement, then the income statement, then the balance sheet. Cash shows what the business really produced, the income statement shows how it reports its profit, and the balance sheet shows what it owns and owes. The course works through one company’s accounts end to end before you analyse your own.

What are the most useful valuation ratios?

Price to earnings, enterprise value to operating profit and free-cash-flow yield cover most needs. Each is meaningful only against similar companies and the company’s own history. The course has you build a small comparison table in a spreadsheet for a sector of your choice.

Who is this course for?

Stock traders who want to know what they are trading, and anyone who wants to read company accounts with confidence. No programming is needed.

What you will be able to do

  • Read an income statement, balance sheet and cash flow statement and explain how they connect.
  • Calculate and compare price-to-earnings, enterprise value and free-cash-flow yields across a sector.
  • Spot warning signs in earnings quality, such as profits not backed by cash.
  • Use fundamental filters to build a watchlist and test whether they improved your simulated trades.

Syllabus, module by module

  1. The income statement

    Revenue, margins, operating profit and earnings per share, and what management can adjust.

  2. The balance sheet

    Assets, debt and equity, working capital, and how a company can run out of cash.

  3. Cash flow

    Operating cash flow, capital spending, free cash flow and why cash is harder to fake.

  4. Valuation

    Price-to-earnings, enterprise value multiples and yields, and comparing companies fairly.

  5. Earnings quality

    Accruals, one-off items, guidance and the signs that results will not repeat.

  6. Fundamentals for traders

    Watchlist filters, earnings seasons and the evidence on value, quality and earnings surprises.

How the certificate is earned

Weekly accounts exercises and two graded problem sets: a full fundamental review of one listed company, and a fundamental watchlist tested against a simulated trading record. On a pass you receive the Course certificate in Fundamental Analysis, issued by the Institute with a verification code. Read how certification works.

Before you start

News Trading: Earnings, Data Releases and Events.

This course counts toward

Questions applicants ask

Do traders need fundamental analysis?

Short-term traders can do without it, but most benefit from knowing what kind of company they trade and when its results are due. Research on value, quality and earnings surprises also gives swing and position traders useful filters. The course tests these filters on your own record.

Is this the same as an equity analyst's training?

It covers the same statements and ratios at an introductory depth, with a trader’s use in mind. It does not build full valuation models.

More in Discretionary Trading

$320 80 hours