Michael "Shoe" Xu

Using return on invested capital, WACC, and economic profit to understand what qualifies as "making money". Plus economic profit vs. net profit.

Previously we've covered how to calculate return of invested capital and the absolute value of such investment in a company. Here we will see how to get the cost of invested capital using WACC.

Judging whether a company is good or not purely from its profitability could be disguising. Like everything in this world, even growth and profit have costs, and that's the cost of invested capital.

How to evaluate the quality of a company? Is a company good or bad? We cover how to calculate the return on invested capital in this one. Read on.

A strategy is the action of giving up one goal in order to pursue another goal by a business. This post helps you understand two strategies: cost leadership strategy and differentiation strategy.

In the previous episode, we examined the time series analysis of the

Industry is dynamic. How do industry changes affect individual company's financial statements? Read on.

How do companies in different industries differ? By using common size analysis, we can clearly see how a paper manufacturer and a TV manufacturer differ in areas such as gross profit, etc.

Companies' financial performances are impacted by the industries they are in. We will set the tones for analyses of the paper manufacturing industry and the household appliance industry.

We will cover Michael Porter Five Forces for Industry Profitability Analysis. Read on.

What's the likelihood that a company can pay back its principal and interest for its long term liabilities? Read on.

Liquidity is the other side of the business. What ratios should businesses focus on if they want to repay short-term debt? Read on.