BUYSIDERS
EST. 2025

Read the numbers the way a diligence team reads them.

The three statements, how they connect, and how to test whether the earnings are real: revenue recognition, EBITDA and its add-backs, ratios, and the red flags that come before a restatement.

The three statementsAnalysis and earnings quality

The three statements

16 min read

How the three financial statements connect

How net income, cash and retained earnings tie the income statement, balance sheet and cash flow statement into one system.

14 min read

Accrual accounting and the matching principle

Why profit is recorded when it is earned rather than when cash moves, and how accruals, deferrals and prepaids make that work.

12 min read

How to read an income statement

The income statement line by line, from revenue to diluted EPS, with margins, the treasury stock method and GAAP versus IFRS.

14 min read

How to read a balance sheet

Assets, liabilities and equity line by line, including goodwill, deferred taxes, treasury stock, AOCI and book value per share.

14 min read

How to read a cash flow statement

Operating, investing and financing cash flows, the indirect reconciliation, and exact definitions of FCF, FCFF and FCFE.

12 min read

Working capital and the cash conversion cycle

Net working capital, DSO, DIO, DPO and the cash conversion cycle, why growth consumes cash, and the working capital peg in M&A.

Analysis and earnings quality

17 min read

Revenue recognition under ASC 606 and IFRS 15

The five-step revenue model worked through bundled contracts, over-time projects, gross versus net and variable consideration.

17 min read

Depreciation, amortization, capex and leases

Depreciation methods with worked schedules, capitalize versus expense, maintenance capex, impairment, and leases under IFRS 16 and ASC 842.

12 min read

EBITDA, adjusted EBITDA and add-backs

What EBIT and EBITDA measure, where EBITDA misleads, and how diligence teams grade add-backs from reported to adjusted EBITDA.

13 min read

Financial ratio analysis and the DuPont framework

Profitability, return, liquidity, leverage and efficiency ratios computed for one company, then ROE decomposed with three and five-step DuPont.

15 min read

Earnings quality and accounting red flags

Cash conversion, accruals ratios, DSO creep, reserve releases, the Beneish M-Score and Altman Z-Score, with a red flag checklist.

15 min read

Non-GAAP measures and reconciliations

What non-GAAP measures are, the SEC rules behind them, worked reconciliations for adjusted EPS, organic growth and FCF, and IFRS 18.