How does one become good at Financial Analysis
There are no shortcuts here. While blogs, books, videos, courses help you take the first steps & guide towards the process of analysis, the only way to learn Financial Analysis is by doing it. Consistent application is the key!
If you really want to learn it, build a habit around it. Start today, and by the end of 2 months, you will have the habit built, along with loads of understanding of financial statements.
Follow these steps
- Spend 10 minutes observing the financial statements of one new company every day
- Note down your observations. No Analysis needed as yet
- Do this for 15 days
After 15 days – Try & join the dots from your observations. Which companies have high margins, which companies are showing growth, where is inventory jumping?
Now try answering WHY this is happening in certain companies and certain sectors
For the next 30 days after this, pick one company every day, and now do the entire analysis on each company. You can increase the time per day to 20 mins, and then 30 minutes.
Note that learning that happens with 45 days of consistent effort.
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