fundamental-analysis — independently scanned and version-tracked by SaferSkills.
SaferSkills independently audited fundamental-analysis (Agent Skill) and scored it 100/100 (green). The audit ran 55 deterministic rules across Security, Supply Chain, Maintenance, Transparency, and Community; it found 0 high-severity and 0 lower-severity findings. The full rule-by-rule trace and per-finding evidence are below. Free, methodology-open.
Findings & checks · 0 flagged
Every scanned point with the score it earned and what moved between them.
First recorded scan — no prior version to compare against.
The primary manifest — the file an agent reads to learn what this artifact does.
Skill: Fundamental Analysis | Domain: trading | Category: research | Level: intermediate Tags:trading,research,fundamental,financials,valuation,moat
Load these when needed — do not pre-load all of them:
| File | Load When |
|---|---|
| references/financial-statements.md | Analyzing income statement, balance sheet, cash flow, FCF, working capital, red flags |
| references/valuation-methods.md | Computing or comparing valuation ratios, running DCF, comps, DDM, profitability/liquidity/leverage/efficiency ratios |
| references/macro-industry.md | Economic indicators, central bank policy, intermarket analysis, Porter's Five Forces, economic moats |
| Ratio | Undervalued | Fair | Expensive | Notes |
|---|---|---|---|---|
| P/E (trailing) | < 10 | 10–20 | > 30 | Compare to sector & growth rate |
| P/E (forward) | < 12 | 12–18 | > 25 | More predictive than trailing |
| PEG | < 1.0 | ~1.0 | > 1.5 | P/E ÷ EPS growth rate |
| P/S | < 1.0 | 1–3 | > 5 | Sector-dependent; SaaS can be 8–20× |
| P/B | < 1.0 | 1–3 | > 5 | Banks/financials: fair at 1–2× |
| EV/EBITDA | < 8 | 8–12 | > 15 | Best for capital-intensive businesses |
| EV/Revenue | < 1 | 1–3 | > 5 | Pre-profit companies |
| Ratio | Poor | Good | Excellent | Notes |
|---|---|---|---|---|
| ROE | < 10% | 15–20% | > 20% | Beware high leverage inflating ROE |
| ROA | < 2% | 5–8% | > 10% | Banks: 1–2% is normal |
| ROIC | < WACC | WACC+5% | > 15% | Value creation only if ROIC > WACC |
| Gross Margin | Sector low | 40%+ (tech) | 60%+ | Highly sector-specific |
| Operating Margin | < 5% | 10–20% | > 25% | Sector-adjusted |
| Net Margin | < 3% | 8–15% | > 20% | Sector-adjusted |
| Ratio | Weak | Acceptable | Strong | Notes |
|---|---|---|---|---|
| Current Ratio | < 1.0 | 1.5–2.0 | > 2.5 | < 1 = liquidity risk |
| Quick Ratio | < 0.7 | 1.0–1.5 | > 2.0 | Excludes inventory |
| Cash Ratio | < 0.3 | 0.5–1.0 | > 1.0 | Most conservative |
| Debt/Equity | > 2.0 | 0.5–1.5 | < 0.5 | Sector-adjusted |
| Debt/EBITDA | > 4× | 2–3× | < 2× | > 5× = distress risk |
| Interest Coverage | < 2× | 3–5× | > 5× | < 1.5× = danger zone |
| Ratio | Poor | Good | Excellent |
|---|---|---|---|
| Asset Turnover | < 0.5 | 0.8–1.5 | > 1.5 |
| Inventory Turnover | < 4 | 6–12 | > 15 |
| DSO (Days Sales Outstanding) | > 60 | 30–45 | < 30 |
| CCC (Cash Conversion Cycle) | > 90 days | 30–60 | < 30 (or negative) |
Income Statement → Profitability (what was earned)
Balance Sheet → Financial position (what is owned/owed)
Cash Flow Statement → Liquidity (actual cash movement)
Key linkages:
Net Income (IS) → Retained Earnings (BS) → Operating CF (CFS)
CapEx (CFS) → PP&E change (BS)
D&A (IS) → Added back in Operating CF (CFS)
FCF = CFO - CapEx (the purest measure of cash generation)| Situation | Best Method | Why |
|---|---|---|
| Stable, predictable FCF | DCF | Intrinsic value based on fundamentals |
| Profitable, comparable peers exist | Comps (EV/EBITDA, P/E) | Market-derived, fast |
| Dividend-paying, mature company | DDM (Gordon Growth) | Dividend stream = value |
| Pre-profit high-growth | EV/Revenue, EV/ARR | No earnings yet |
| Asset-heavy (banks, real estate) | P/B, P/TBV, P/FFO | Assets = value driver |
| Acquisition / M&A context | EV/EBITDA + DCF | Enterprise-level view |
| Cyclical industry | EV/EBITDA on normalized earnings | Avoid peak/trough distortions |
Rule: Always triangulate — use 2–3 methods and compare implied price ranges.
references/financial-statements.mdreferences/valuation-methods.mdreferences/macro-industry.md~30 seconds. Free. No account. Every finding cites a rule and a line of evidence.