Fundamental analysis is used to estimate a true value of an asset such as a company or a stock. Financial statements prepared by accountants and tested by auditors are used extensively in fundamental analysis.

In part 1 of this series, we learned how to calculate the cost of different forms of financing -- debt, preferred equity, and common equity. In this article, we’ll cover some ways that information can be used to make sound business decisions.

In this two-part article series, we will discuss how to calculate a firm’s cost of capital. This is an important measurement with several business applications. We’ll go over the basic concepts below - the second part will focus on the practical applications.

In the first article of this series, we gave an overview of standard financial statements and additional disclosures and notes to the statements that a corporation produces on a periodic basis. In this article, we’ll touch on official reports that must be filed with the Securities and Exchange Commission by public companies.

In this series of articles, we will discuss the different types of financial statements required of a corporation by US GAAP and the different reports required of public companies by the Securities and Exchange Commission. For this part 1, we will give a brief overview of the major financial statements produced by a corporation - balance sheet, income statement, statement of shareholders’ equity, cash flow statement and related footnotes.

Par value and no par value stocks exist and accounting for them may be different. In this article, we will review par value of stock, watered stock and sample journal entries to account for issuing stocks.

Learn about stock splits and how they are different from stock dividends, view examples of stock splits and understand accounting for stock splits.

Learn about retained earnings and how retained earnings are determined.

Learn about accounting for short-term investments: trading securities and available-for-sale securities.

Learn about different budget types and classification in accounting.