Part 7 · In practice: read and judge for yourself · Lesson 37
Graduation: your own one-page company analysis note
Wrap up everything you learned over the 37 lessons into a six-section one-page note. Enter numbers and the ratios are calculated automatically, and you can print it or save it as a PDF.
QToday's question
You've gone through all 37 lessons, but when you actually look at a company you're interested in, there are far too many numbers. What should you pick, and how should you organize it?
In Lesson 1 you learned that financial statements are a company's health checkup chart, and since then you've passed through 37 lessons covering the balance sheet, income statement, cash flow statement, ratios and disclosures. You can't go over everything you learned from scratch every time. In this final lesson we build a way to summarize one company on a single sheet of paper with six sections.
MAPLearning map for this lesson
We build it up in three steps. At the end of each step, a 'Quick check' lets you test your understanding before moving on.
This lesson sums up the whole course. Try recalling one representative lesson from each part: Lesson 5 the annual report table-of-contents map, Lesson 10 debt-to-equity and current ratios, Lesson 14 operating profit, Lesson 20 free cash flow, Lesson 23 ROE, Lesson 31 capital increases, CBs and treasury shares, and Lesson 34 the red flag checklist. Any lesson you remember poorly can be reopened right away from the 'Lesson 37 map' below.
- STEP 1 · Basic conceptsThe six sections of the one-page note
You can say which question each of the six sections answers (business structure, growth, profitability, safety, cash, and shareholders and disclosures) and where to find the numbers.
- STEP 2 · Understanding the principleLinking the numbers into one story
You can explain how the numbers in the six sections check each other (profit and cash, ROE and debt-to-equity ratio, PBR = PER × ROE).
- STEP 3 · Real-world applicationFilling in one page with two companies
You can fill in the note with Robin Bakery and Dark Cloud Electronics, and write a one-line conclusion that contains the metrics to check in the next report.
STEP 1The six sections of the one-page note
Before making the note, let's lay out the 37 lessons you've walked through on a single map.
An easy analogy · The first page of a health checkup report
A health checkup produces a thick report, but the doctor looks at the summary on the first page first. With just a few numbers such as height, weight, blood pressure, blood sugar and liver values, you can tell where to look more closely.
An annual report is also hundreds of pages. The one-page note is making the 'first-page summary' of that thick report with your own hands. With fixed sections, you can compare any company in the same order.
The 7 parts are one story
The Reading Financial Statements course is divided into seven parts, but it is one story connected in a line. In Part 1 you learned DART and the annual report's table of contents; in Part 2, the balance sheet, a company's assets and debts; in Part 3, the income statement, a year of business results; and in Part 4, the cash flow statement, the money that actually came into the bank account. Part 5 was about tying these numbers together into ratios to compare with other companies and other years, and Part 6 was about reading disclosures beyond the numbers (business overview, notes, audit opinion, capital increases and CBs, ownership). Part 7 is practice in using all of this for actual judgment.
See it as a picture: the Lesson 37 map
Tap a part. Its key question and lesson list appear, and lessons read in this browser are marked in green. The bar is the share read in each part.
Find the report → assets and debt → business results → actual cash → compare with ratios → disclosures beyond the numbers → real-world judgment
Structure of the Robin Invest Reading Financial Statements course (7 parts, 37 lessons). Read marks are progress records saved in this browser, stored separately on each device without login.
The six sections and each section's question
The compresses seven parts of content into six boxes. Each box answers one question, and you write down only two or three numbers. Keeping the numbers few is what lets you refill it every quarter.
| Box | Key question | Numbers to record | Where to find them |
|---|---|---|---|
| 1 Business structure | What does it sell to make money? | , key raw materials | II. Business Overview (Lesson 28) |
| 2 Growth | How fast and how steadily does it grow? | Revenue growth rate, 3–5-year | III-1 Summary financial information (Lesson 27) |
| 3 Profitability | How much does it keep from the core business? | , ROE | Income statement (Lessons 14, 23) |
| 4 Safety | Does it have the strength to hold up? | , current ratio | Balance sheet (Lesson 10) |
| 5 Cash | Does profit arrive as actual money? | , | Cash flow statement (Lessons 19, 20) |
| 6 Shareholders and disclosures | Is my share protected? | EPS and payout ratio, dilution, audit opinion | III-6 Dividends, material event reports, audit reports (Lessons 25, 30, 31) |
The order has a reason too. You first need to know what the company earns from in order to judge whether its growth rate and margin are high or low compared with the industry (Lesson 26), and only after seeing the profit can you check whether it came in as cash (Lesson 22). The last section looks at how the money earned comes back to me as a shareholder, or whether it is diluted by new share issuance.
Quick checkIn which of the six sections would you check the suspicion that "profit has grown steadily but money isn't piling up in the bank account"?
STEP 2Linking the numbers into one story
The six sections are not separate numbers. They have partners that check each other.
Numbers check each other
The one-page note is strong because one number confirms another. If you remember three pairs, odd spots will catch your eye on their own while you fill in the note.
First, earnings and cash. Net income in Box 3 and operating cash flow in Box 5 should be of similar size when you look across several years. Robin Bakery (fictional) has net income of KRW 1.2 billion and operating cash flow of KRW 1.8 billion, so cash exceeds earnings. That is because non-cash expenses such as depreciation are added back (Lesson 19). Conversely, if net income is positive but operating cash flow stays negative, you should question its (Lesson 22).
Second, ROE and the debt-to-equity ratio. breaks down into profit margin × turnover × leverage (Lesson 23). Even if ROE is high, if the debt-to-equity ratio is also high, that return may have been built on borrowed money. That is why the ROE in Box 3 should always be read side by side with the debt-to-equity ratio in Box 4.
Third, price and value. Once you enter the stock price, you get the and the , and the two are linked by the relationship P/B = P/E × ROE (Lesson 24). For Robin Bakery, that is 15x × 20% = 3x. If P/B is low and ROE is also low, there is a reason it is cheap; if P/B is low but ROE is high, look for why the market prices it low in Box 6 (dilution, audit opinion) and in the notes (Lesson 29).
The three pairs of the one-page note
1 Net income ↔ operating cash flow: does profit arrive as money? 2 ROE ↔ debt-to-equity ratio: is the return built with debt? 3 PER·PBR ↔ ROE: how is the price relative to earning power?
See it as a picture: your own one-page note
Enter numbers in the note below and the ratios are calculated right away. Enter amounts in units of KRW 100 million, share counts in units of 10,000 shares, and stock price in KRW. First tap 'Fill with Robin Bakery', then open the annual report of a company you're interested in and fill it in yourself. What you enter is saved only in this browser.
Units: amounts in KRW 100 million · shares in 10,000 · price in KRW. If a box is left blank, ratios that use it show '–'.
Formulas: EPS = net income ÷ number of shares, BPS = equity ÷ number of shares, PER = stock price ÷ EPS, PBR = stock price ÷ BPS, ROE = net income ÷ equity (ending), debt-to-equity ratio = liabilities ÷ equity, operating margin = operating profit ÷ revenue, FCF = operating cash flow − capital expenditure, payout ratio = dividends ÷ net income. For companies that separate the owners' share, enter net income and equity attributable to owners of the parent (Lesson 11). The example companies are fictional, and what you enter is not sent to any server.
Common misconceptions
- "The more boxes you fill in, the better the analysis?"
- No. Two or three numbers per section are enough. More numbers mean more conflicting signals, which blur the conclusion and make it hard to refill next quarter.
- "If all the ratios are good, it's a company worth buying?"
- The one-page note is a tool for checking a company's strength, not for judging whether the price is reasonable. Even a strong company can turn out badly if bought at too high a price, and you need to look at the same industry and several years together (Lessons 26, 27).
- "Once you've written it, you're done?"
- The note shows its power when you update it every time a quarterly report comes out. The moment you check whether the tracking metrics you wrote last time were right, the note becomes your own review record.
Quick checkROE is high at 25%, but the debt-to-equity ratio is 400%. What memo would be good to leave in the note?
STEP 3Filling in one page with two companies
Let's write the two fictional companies that stayed with us throughout the course side by side in the note. The numbers are exactly the same as what you've learned so far.
Example 1 · Robin Bakery (fictional): all six sections point the same way
Business structure Revenue KRW 12 billion = bread 7.2 + cake 3.6 + coffee 1.2 (KRW billion). Raw materials are flour, butter and coffee beans (Lesson 28). Growth Revenue KRW 11 billion → 12 billion (+9.1%), 4-year CAGR about 9% (Lesson 27). Profitability Operating margin 12.5%, ROE 20%. Safety Debt-to-equity ratio about 67%, current ratio 150%. Cash Operating cash flow KRW 1.8 billion > net income KRW 1.2 billion, FCF KRW 1.0 billion. Shareholders and disclosures EPS KRW 600, payout ratio 25%, no dilution filings, unqualified audit opinion.
All six sections point the same way. Profit arrives as cash, it doesn't lean on debt, and part of what it earns is returned as dividends. At a stock price of KRW 9,000, a PER of 15x and PBR of 3x are values consistent with an ROE of 20%.
One-line conclusion: check in the next quarterly report whether the coffee share (10%) is growing, and whether the 12.5% operating margin holds when flour prices rise.
Example 2 · Dark Cloud Electronics (fictional): profitable on net income only
Business structure 37.5% of revenue of KRW 24 billion is sales to affiliates (Lesson 29). Growth Revenue KRW 22 billion → 24 billion (+9.1%). On growth rate alone, it is the same as Robin Bakery. Profitability Operating margin 3.3%, ROE 6%. Safety Debt-to-equity ratio 400%, current ratio 93%. Cash Net income of KRW 300 million but operating cash flow of −KRW 2.2 billion and FCF of −KRW 2.7 billion. Shareholders and disclosures 3 CB issues totaling KRW 6 billion over 2 years (if converted, shares go from 1 million to 2.2 million), largest shareholder changed to an investment partnership (Lesson 32), auditor change, no dividend.
If you look only at the growth rate and the word "profitable," the two companies seem similar. But the other five boxes all send warnings. Earnings are tied up in trade receivables and inventory (Lesson 21), the cash shortfall was filled with convertible bonds, and the price is for existing shareholders (Lesson 31). This is a company that trips several items on the red flag checklist in Lesson 34.
One-line conclusion: check whether operating cash flow turns positive, whether additional CB or capital increase filings appear, and whether the next audit report contains going concern language.
The conclusion is not a verdict but the metrics to check
Look at the last line of the two examples: there is no "good" or "bad." Instead, it lists the to watch in the next report. The purpose of a one-page note is not to deliver a verdict but to make visible the assumptions on which you are looking at this company. Those assumptions are your . For example, if you assumed that "Robin Bakery can raise prices even when costs rise," the tracking metrics are gross margin and operating margin. If those numbers turn down in the next quarterly report (Lesson 4), re-examine the assumption.
For investing, like this: a good note and a disappointing note
| Disappointing note | Good note | Why is it better? |
|---|---|---|
| "Financially solid" | "Debt-to-equity ratio 67%, current ratio 150%, interest coverage 15x" | The basis for the judgment is left in numbers |
| "Growth stock" | "Revenue 4-year CAGR 9%, track whether the 10% coffee share grows" | It records what is driving growth |
| "Profitable company, so safe" | "Net income KRW 300 million vs operating cash flow −KRW 2.2 billion, CB KRW 6 billion" | It looked at profit and cash together |
| "Good company, buy" | "If next quarter's operating margin is below 12%, recheck cost pass-through" | It leaves a condition to check instead of a verdict |
Update the note every quarter. When preliminary results come out, fix Section 3 (Lesson 33); when the quarterly report comes out, Sections 2–5; and when a material event report or ownership filing comes out, Section 6 (Lessons 31, 32). Look at the winds of the overall market separately with the Weekly macro checklist in Economics. If you separate the company's strength (the one-page note) from the market's winds (the weekly checklist), it becomes easier to tell whether the cause is the company or the market when the stock price swings.
Not always. The six sections of the one-page note are an educational framework to make sure you don't miss financial statements and disclosures, and they cannot capture management ability, the industry's competitive landscape, price level, or an individual's investment horizon and risk tolerance. The example companies are fictional, and the note's conclusions are not recommendations to buy or sell.
Graduation card
When you've read all 37 lessons of Reading Financial Statements in this browser, the card below turns into a completion card. If you've also read all 43 Economics lessons, a completion card for both courses appears.
Reading Financial Statements progress
Checking your progress…
Quick checkWhich is a more suitable conclusion for a one-page note: "It's a good company" or "If next quarter's operating margin is below 12%, recheck cost pass-through"?
✓What we learned today
- The one-page note organizes a company in six sections: business structure → growth → profitability → safety → cash → shareholders and disclosures. The order flows from 'what does it earn from' to 'who does that money go to.'
- Two or three numbers per section are enough. Record the revenue mix, revenue growth rate, operating margin, debt-to-equity ratio, operating cash flow and FCF, and dilution, dividends and audit opinion.
- The numbers check each other. If net income grew but operating cash flow is negative, question earnings quality; if ROE is high but the debt-to-equity ratio is also high, suspect an ROE built with debt.
- Robin Bakery (fictional), with an operating margin of 12.5%, debt-to-equity ratio of about 67%, FCF of KRW 1.0 billion and ROE of 20%, has all six sections pointing the same way, while Dark Cloud Electronics (fictional) is profitable on net income only and all the other sections send warnings.
- The note's conclusion is not 'good' or 'bad' but the metrics to check in the next report. Each time a quarterly report comes out, update those metrics first.
You've finished all 37 lessons of Reading Financial Statements. Now you can read a single company by its numbers. Check the winds of the overall market every week with the 'Weekly macro checklist' in Economics, and the sectors favored in the current phase with the Macro Map. Using the one-page note and the weekly checklist together lets you see the company and the market at the same time.
Quiz5-question quiz
Pick an answer and it's graded right away with an explanation.
Q1. Which is the correct order of the six sections of the one-page note?
You need to know what it earns from (business structure) first to judge growth rate and margin against the industry; after seeing profit, check whether it arrived as cash; and finally see how that money comes back to shareholders.
Q2. Net income has been positive for 3 years in a row, but operating cash flow has been negative for 3 years in a row. What should you suspect first?
Being profitable while cash dries up is the sign of insolvency despite profits and of earnings quality problems we saw in Lessons 21 and 22. Also check whether trade receivables and inventories are growing faster than revenue.
Q3. Robin Bakery (fictional) has a PER of 15x and an ROE of 20%. What is the PBR?
PBR = PER × ROE = 15 × 0.2 = 3x (Lesson 24). Calculating stock price KRW 9,000 ÷ BPS KRW 3,000 gives the same result.
Q4. Dark Cloud Electronics (fictional) issued convertible bonds three times in 2 years. In which section of the one-page note, and what, should you write?
When a CB converts into shares, the share count rises and existing shareholders' stake and EPS are diluted (Lesson 31). Frequent CBs are also an item on the Lesson 34 red flag checklist.
Q5. What is the best conclusion to leave after filling in the one-page note?
A note's conclusion is not a verdict but the metrics and conditions to check in the next report. Only then can you review each quarter whether your investment thesis was right.
NextTerms · Next lesson · Related tools
A note that organizes one company on a single sheet of paper in six sections: business structure, growth, profitability, safety, cash, and shareholders and disclosures. Only two or three numbers and a one-line memo are written per section so that it can be refilled every quarter.
Investment thesisInvestment thesisA one- or two-sentence note on which company you are looking at and on what premise. For example, if you set the premise that "the company can raise prices even when costs rise," you also decide which number (the tracking metric) will confirm whether that premise holds.
Tracking metricTracking metricThe number you will check in the next report to see whether your investment logic holds. Instead of verdicts like "good" or "bad," write it as a number and a condition, such as "if the operating margin falls below 12%, revisit the cost pass-through."
Revenue mixRevenue mixThe shares showing which products, segments and regions the total sales come from. It appears as a table in annual report II-2 Major products and services.
Compound annual growth rate (CAGR)Compound annual growth rateA value that reduces growth over several years to 'what percent would it be if it grew at the same rate every year.' It is calculated as (ending value ÷ beginning value)^(1 ÷ number of years) − 1 and does not show swings in between.
Operating marginOperating marginOperating profit divided by revenue. It shows how many won are left from the core business per 100 won of revenue. Normal ranges differ greatly by industry.
Debt-to-equity ratioDebt-to-equity ratioLiabilities ÷ equity. It shows how much must be repaid per KRW 100 of shareholders' equity. Averages differ greatly by industry, so compare within the same industry.
Cash flow from operating activitiesCash flow from operating activitiesThe cash that actually came in and went out from the core business, such as selling products and paying for materials, wages and taxes. Whether it is consistently positive is the basic check on a company's strength.
Free cash flow (FCF)Free Cash FlowOperating cash flow minus capital expenditure (acquisition of tangible assets). It's the cash left after making the investments needed to keep the business running, and it is the source of dividends, buybacks, and debt repayment.
Earnings qualityEarnings qualityThe degree to which profit comes in from the core business, repeatedly, and as cash. If there are many one-off gains, or little cash comes in relative to profit, earnings quality is considered low.
ROE (Return on Equity)Return on EquityNet income divided by net assets (equity), showing how much shareholders' money earns in a year. The relationship PBR = PER × ROE links the two multiples.
EPSEarnings Per ShareNet income ÷ number of shares outstanding. The profit one share earned in a year.
P/EPrice-Earnings RatioShare price ÷ EPS. A multiple showing how many times one year's earnings the market pays for a share. It varies greatly with interest rates and investor sentiment.
P/BPrice-to-Book RatioShare price ÷ book value per share (BPS). It shows how many times the company's book net assets the stock trades at.
BPS (Book value Per Share)Book value Per ShareThe company's net assets (assets − liabilities) divided by the number of shares outstanding. Dividing the share price by BPS gives PBR.
Payout ratioPayout ratioTotal cash dividends ÷ net income attributable to owners of the parent. It shows what percentage of net income was paid out as dividends. Even if the dividend stays the same, it rises when earnings fall.
DilutionDilutionWhen new shares are created, existing shareholders' ownership % and per-share figures (EPS, BPS, etc.) become smaller. Ownership after dilution = my shares ÷ (existing shares + new shares).
Non-clean opinionModified (non-clean) audit opinionA collective term for the audit opinions other than unqualified: qualified, adverse and disclaimer. Adverse, disclaimer and qualified due to a scope limitation are grounds for delisting by the exchange.
Check triggerCheck triggerA condition set in advance, such as "if this number appears, take another look at this." Example: "if the 10-year yield goes above 5.3%, review the weight of growth stocks." It is a way of fixing the order of your responses rather than making a forecast.
Put what you learned to use right away
All Learn (Economics) courses→Weekly Economic Checklist→Macro Map→CAGR Calculator→Paid-in Capital Increase / CB Dilution Calculator→Earnings Calendar→This is educational material and not investment solicitation. There is no guarantee that past relationships will repeat in the future.