Quizzes

Fundamental analysis quiz

15 questions · from 15 lessons

Questions on reading a business through its numbers: what the income statement, balance sheet and cash flow statement each show, what a P/E ratio really means, and how an earnings report moves a stock.

Test yourself

One question from each lesson in this topic. Pick an answer to see why, then open the lesson if you want to review it.

Question 1 of 15
The drawing shows a hypothetical income statement in millions of dollars. What is the company’s operating margin?
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Question 2 of 15
Each card shows a hypothetical company’s share price and its EPS over the last year. Which company has the highest P/E ratio?
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Question 3 of 15
In the report card, the company beat the estimates on EPS and revenue. Which line best explains why the stock could still fall?
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Question 4 of 15
Each card shows a hypothetical company’s net income, preferred dividends and weighted average shares. Which company has the highest EPS?
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Question 5 of 15
Each card shows a hypothetical company’s market cap, debt, cash and EBITDA, in $ millions. Which company has the lowest EV/EBITDA?
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Question 6 of 15
Each card shows a hypothetical company’s operating cash flow and capital expenditures. Which company has the highest free cash flow?
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Question 7 of 15
The drawing shows four hypothetical stocks. Value each one as EPS × the lower of its two P/E ratios. Which trades furthest below that conservative fair value?
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Question 8 of 15
Each hypothetical company in the drawing pays a total of $500M in cash over five years. At a 10% discount rate, which stream is worth the most today?
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Question 9 of 15
The drawing shows four hypothetical stocks, each with its price (filled dot) and conservative fair value (open circle). Which offers the largest margin of safety?
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Question 10 of 15
All four hypothetical stocks in the drawing trade below their sector’s average P/E. Which shows the classic value-trap pattern?
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Question 11 of 15
Using the formula on the scale: a hypothetical company has total assets of $1,000 million and total liabilities of $450 million. What is its shareholders’ equity?
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Question 12 of 15
Each card shows a hypothetical company’s revenue, operating income and net income. Which company has the highest operating margin?
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Question 13 of 15
Each card shows a hypothetical company’s current assets and current liabilities. Which company has a current ratio below 1?
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Question 14 of 15
Each card shows a hypothetical company’s net income, shareholders’ equity and total assets. Which company has the highest ROE?
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Question 15 of 15
Each card shows a hypothetical company’s shares at the start of the year, shares bought back and shares issued to employees during the year. Which company cut its share count the most, in percentage terms?
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Test yourself

The drawing shows a hypothetical income statement in millions of dollars. What is the company’s operating margin?

Each card shows a hypothetical company’s share price and its EPS over the last year. Which company has the highest P/E ratio?

In the report card, the company beat the estimates on EPS and revenue. Which line best explains why the stock could still fall?

Each card shows a hypothetical company’s net income, preferred dividends and weighted average shares. Which company has the highest EPS?

Each card shows a hypothetical company’s market cap, debt, cash and EBITDA, in $ millions. Which company has the lowest EV/EBITDA?

Each card shows a hypothetical company’s operating cash flow and capital expenditures. Which company has the highest free cash flow?

The drawing shows four hypothetical stocks. Value each one as EPS × the lower of its two P/E ratios. Which trades furthest below that conservative fair value?

Each hypothetical company in the drawing pays a total of $500M in cash over five years. At a 10% discount rate, which stream is worth the most today?

The drawing shows four hypothetical stocks, each with its price (filled dot) and conservative fair value (open circle). Which offers the largest margin of safety?

All four hypothetical stocks in the drawing trade below their sector’s average P/E. Which shows the classic value-trap pattern?

Using the formula on the scale: a hypothetical company has total assets of $1,000 million and total liabilities of $450 million. What is its shareholders’ equity?

Each card shows a hypothetical company’s revenue, operating income and net income. Which company has the highest operating margin?

Each card shows a hypothetical company’s current assets and current liabilities. Which company has a current ratio below 1?

Each card shows a hypothetical company’s net income, shareholders’ equity and total assets. Which company has the highest ROE?

Each card shows a hypothetical company’s shares at the start of the year, shares bought back and shares issued to employees during the year. Which company cut its share count the most, in percentage terms?