Fundamental analysis doesn’t just focus on a company’s current financial health—it also considers external events and broader economic trends that can have dramatic, sometimes sudden, impacts on stock prices. These are known as event-driven and macro strategies. Investors and traders use these approaches to anticipate and react to pivotal moments, taking positions before or after major events and market shifts. In this chapter, we detail key event-driven and macro strategies, how each affects stock selection and timing, and how real-world investors use them to profit or protect their portfolios.

Investors today recognize that a company's long-term performance is shaped not only by financial metrics, but also by quality of management, corporate governance, and commitment to sustainability. These factors—often grouped as ESG (Environmental, Social, Governance)—are increasingly at the heart of fundamental analysis, impacting risk, reputation, and value creation. This chapter covers key metrics and qualitative aspects in this domain, explaining their significance, examples, and how they guide stock buying and selling decisions.

While general financial ratios such as profitability, liquidity, and leverage are important in all industries, sector-specific and special metrics offer crucial, tailored insights for understanding companies in particular sectors. These metrics capture the nuances of industries like retail, real estate, finance, insurance, technology, and more—areas where traditional ratios may not tell the whole story. For analysts and investors, mastering these metrics is essential for accurate valuation, forecasting, and investment decisions. This chapter details each key metric, explains its calculation and meaning, and provides practical examples of how investors use them in buying and selling stocks.

Cash flow metrics are crucial in assessing a company’s financial health, operational efficiency, and long-term sustainability. Unlike accounting profits, which can be influenced by non-cash items and subjective estimates, cash flow metrics reflect the actual movement of cash in and out of a business. Investors, analysts, and creditors rely on these figures to evaluate a company’s ability to generate cash, reinvest in growth, pay dividends, and withstand downturns. This chapter explores the key cash flow metrics—Operating Cash Flow, Free Cash Flow (FCF), Price to Free Cash Flow, Operating Cash Flow Ratio, and Capital Expenditure (CapEx) strategies—explaining each in detail, with practical examples and guidance on buy/sell decisions.

Dividend and shareholder return fundamentals focus on how a company rewards its shareholders, either through direct cash payments (dividends), indirect capital appreciation (share buybacks), or reinvesting profits (retained earnings). These metrics are crucial for income investors, long-term shareholders, and anyone assessing a company’s financial discipline and shareholder alignment. Reliable and growing shareholder returns can signal a company’s health and management’s confidence in the future. This chapter explains the major dividend and shareholder return metrics, their calculation, interpretation, examples, and their use in investment decisions.

Efficiency and asset management metrics measure how effectively a company uses its resources—assets, receivables, payables, and inventory—to generate sales and profit. High efficiency typically leads to better cash flow, profitability, and competitiveness, making these ratios vital in fundamental stock analysis. Both value and growth investors use these metrics to spot well-managed businesses or to avoid those with hidden operational risks. This chapter explores each key metric, its calculation, interpretation, practical examples, and its role in buy/sell decisions.

Liquidity and leverage metrics are essential for understanding a company’s ability to meet short-term obligations, manage debt, and withstand financial stress. While profitability and growth are crucial for long-term investment, the lack of liquidity or the burden of excessive leverage can lead to sudden business failure—even for firms with strong sales and earnings. Investors, creditors, and analysts use these ratios to assess risk, financial flexibility, and the company’s capacity to survive downturns or seize new opportunities. This chapter explores key liquidity and leverage ratios, their formulas, practical examples, and real-world application in buy/sell decisions.