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.
Informational only - not investment advice.
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.
Reading a company's financials
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.
Company filings and the story behind the numbers
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.