Screen Setup for Fundamental Analysis
Updated
Recently I experimented with TradingView's "fundamental metrics" feature by mixing and matching up the financial information indicators. Finally, created a dedicated layout called "Fundamental analysis" and I like it a lot. Realizing that this feature is receiving less attention than it should be getting, I've decided to share my setup with everyone who's reading this to see.
Setup:
I've split my screen into two sides with (i) symbol, (ii) interval, and (iii) time all synced up.
Left screen: Trend analysis on financial performance (the income statement)
Right screen: Trend analysis on financial position (the balance sheet), along with changes in cash positions (statement statement of cash flows)
They're all just high level breakdowns. We are not trying to come up with companies' intrinsic values by just staring at bundles of colorful rainbow lines.
For each quadrant, I've placed the key Financial Statement Line Items (FSLIs), and key ratios (i.e. activity, liquidity, solvency, or profitability ratios) that are relevant to my decision making process. This is not a standard template because every value investor is different in terms of what they want to see at first sight when presented with companies' financial statements.
TradingView had by default put labels with numbers on them, I removed all of those because I'm just interested in looking at the trends. If I need the exact information, I'll either dig up the SEC filings or go get copies of analysts' reports. But before ever doing that, I want to get a quick mental snapshot of the company's financials.
Example: A quick walkthrough of TSLA (by just looking at the layout as shown in the example) over 5 years; As of latest quarter:
(A) Financial performance wise:
- EBIT and EBITDA had increased, all thanks to ramp up of revenue, and helped by decreasing of COS and OPEX.
- as a common shareholder, it's great to see basic EPS increasing, but beware of dilutive effects
(B) Financial position wise:
- from perspective of a shareholder, it's great to see debt decreasing over time; shown by decreasing in net debt, corresponded by decreasing of D/E.
- with increase in interest cover ratio, it tells that TSLA is starting to make enough money to have enough EBIT to cover their finance costs; good
- overall liquidity wise, there had been decrease in quick ratio. This is explainable due to increase of inventory as shown by the gray line. This is okay, as long as inventory turnover is stable going forward (inventory activity ratios can be added if wanted, but I just plotted total inventory; normally I just want to know whether companies hold inventories or not).
Advantage of this setup:
- I can go through my TradingView watchlists and spend just 5 to 10 seconds on each company to get brief insights of their fundamentals.
Disadvantage of this setup:
- The scale is a problem. By default, they are auto-fitted. Due to nature of different FSLIs and ratios, you cannot resize them to obtain a meaningful universal scale. Be careful when deciding to work with comparatives with this setup. Example: if you look at basic and diluted EPS, it seems like the dilutive effect is immaterial because the lines are are stacked up. But if you look at the scales, they're completely different!
Setup:
I've split my screen into two sides with (i) symbol, (ii) interval, and (iii) time all synced up.
Left screen: Trend analysis on financial performance (the income statement)
Right screen: Trend analysis on financial position (the balance sheet), along with changes in cash positions (statement statement of cash flows)
They're all just high level breakdowns. We are not trying to come up with companies' intrinsic values by just staring at bundles of colorful rainbow lines.
For each quadrant, I've placed the key Financial Statement Line Items (FSLIs), and key ratios (i.e. activity, liquidity, solvency, or profitability ratios) that are relevant to my decision making process. This is not a standard template because every value investor is different in terms of what they want to see at first sight when presented with companies' financial statements.
TradingView had by default put labels with numbers on them, I removed all of those because I'm just interested in looking at the trends. If I need the exact information, I'll either dig up the SEC filings or go get copies of analysts' reports. But before ever doing that, I want to get a quick mental snapshot of the company's financials.
Example: A quick walkthrough of TSLA (by just looking at the layout as shown in the example) over 5 years; As of latest quarter:
(A) Financial performance wise:
- EBIT and EBITDA had increased, all thanks to ramp up of revenue, and helped by decreasing of COS and OPEX.
- as a common shareholder, it's great to see basic EPS increasing, but beware of dilutive effects
(B) Financial position wise:
- from perspective of a shareholder, it's great to see debt decreasing over time; shown by decreasing in net debt, corresponded by decreasing of D/E.
- with increase in interest cover ratio, it tells that TSLA is starting to make enough money to have enough EBIT to cover their finance costs; good
- overall liquidity wise, there had been decrease in quick ratio. This is explainable due to increase of inventory as shown by the gray line. This is okay, as long as inventory turnover is stable going forward (inventory activity ratios can be added if wanted, but I just plotted total inventory; normally I just want to know whether companies hold inventories or not).
Advantage of this setup:
- I can go through my TradingView watchlists and spend just 5 to 10 seconds on each company to get brief insights of their fundamentals.
Disadvantage of this setup:
- The scale is a problem. By default, they are auto-fitted. Due to nature of different FSLIs and ratios, you cannot resize them to obtain a meaningful universal scale. Be careful when deciding to work with comparatives with this setup. Example: if you look at basic and diluted EPS, it seems like the dilutive effect is immaterial because the lines are are stacked up. But if you look at the scales, they're completely different!
Note
For line-items of negative-balances that are unfavorable to earning, and ultimately to RE, it's better to select "Invert scale".Attached a screenshot; option to select is accessed by right clicking on the side of the panel.
s3.tradingview.com/snapshots/x/xWA6UYlJ.png
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Disclaimer
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