# FolioFundamentals — Frequently Asked Questions

## About FolioFundamentals

**What is FolioFundamentals?**
FolioFundamentals is a free stock analysis platform for retail investors. It covers US, Canadian, and UK markets and assigns every stock a 0–100 FolioScore from a proprietary AI and machine-learning algorithm, built by backtesting more than 30 years of market history across 70+ metrics and tens of thousands of companies. The score spans six pillars: Valuation, Growth, Quality, Financial Health, Momentum, and Shareholder Returns. Historical valuation data goes back up to 30 years per metric. The first 10,000 members get their first year free.

**How does the FolioScore work?**
The FolioScore rates any stock from 0 to 100 using a proprietary AI and machine-learning algorithm, built by backtesting more than 30 years of market history across 70+ metrics and tens of thousands of companies. It reads six pillars: Valuation (earnings, cash flow and enterprise-value multiples), Growth (revenue and earnings growth, and whether it is accelerating), Quality (returns on capital, margin trend, cash conversion), Financial Health (leverage, interest coverage, liquidity), Momentum (price trend against its own history and its sector), and Shareholder Returns (dividends, buybacks and their affordability). Each reading is judged against sector-aware standards and the company's own history. Every score maps to one of four verdicts — Strong Buy, Buy, Hold or Avoid. Analyst opinion is deliberately excluded, and the factor list, thresholds and weights are proprietary.

**How does FolioFundamentals compare to Finviz or Yahoo Finance?**
FolioFundamentals interprets financial data — Finviz and Yahoo Finance display it. Key differences: FolioFundamentals provides a composite 0–100 AI and machine-learning score (neither competitor does), historical valuation context going back up to 30 years (Finviz has none; Yahoo Finance is limited), sector-normalized scoring, dividend growth streak tracking, and Canadian and UK market coverage. FolioFundamentals is free, where Finviz Elite is $24.96/month.

**How much does FolioFundamentals cost?**
Everything is included free, with no credit card required. There is no paid plan. Signing in unlocks unlimited watchlists, advanced analytics, priority data refresh, and full 30-year historical data.

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## Fundamental Analysis

**How do I analyze stock fundamentals?**
Start by examining a company's financial statements using FolioFundamentals' Stock Analyzer. Look at key metrics: P/E ratio for valuation, earnings growth for momentum, free cash flow for true profitability, and debt-to-equity for financial stability. Compare these against industry peers and historical averages. FolioFundamentals calculates a Fundamental Score (0–100) that synthesizes these signals automatically, saving hours of manual research.

**What is a good P/E ratio for a stock?**
The right P/E depends on the industry, growth rate, and market conditions. A P/E of 15–20 is typical for mature companies; growth stocks often trade at 25–50+. More important than the absolute number: compare the stock's current P/E against its own 5-year average, its industry median, and the S&P 500 average (~20). A low P/E can signal undervaluation — but verify it isn't cheap for a reason (declining earnings, industry headwinds). FolioFundamentals shows P/E vs. the stock's own 30-year history automatically.

**How do I calculate intrinsic stock value?**
Intrinsic value represents a stock's true worth based on fundamentals. Common methods: (1) Discounted Cash Flow (DCF) — project future free cash flows and discount to present value using a required rate of return; (2) Price-to-Book (P/B) — compare market price to book value per share; (3) Earnings Multiple — multiply normalized earnings by a justified P/E. All methods require assumptions about growth rate and discount rate. FolioFundamentals surfaces valuation signals derived from these approaches, benchmarked against each stock's own history.

**What does free cash flow tell you about a company?**
Free Cash Flow (FCF) = Operating Cash Flow − Capital Expenditures. It shows how much cash a company generates after maintaining and growing its asset base — the cash available for dividends, buybacks, debt repayment, or reinvestment. Growing FCF signals operational strength. Declining FCF may signal trouble. FCF is harder to manipulate than reported earnings, making it a reliable health indicator. A high FCF yield (FCF ÷ Market Cap) can signal undervaluation. FolioFundamentals tracks FCF yield vs. the stock's own 5-year and 3-year averages.

**How do I read a company's income statement?**
An income statement flows as: Revenue (top line) → minus Cost of Goods Sold (COGS) → Gross Profit → minus Operating Expenses → Operating Income → minus Interest and Taxes → Net Income (bottom line). Key ratios: Gross Margin = Gross Profit ÷ Revenue (pricing power); Operating Margin = Operating Income ÷ Revenue (efficiency); Net Margin = Net Income ÷ Revenue (true profitability). Improving margins signal a strengthening business; declining margins signal competitive pressure or rising costs. FolioFundamentals displays multi-year margin trends visually.

**What is the difference between EV/EBITDA and P/E?**
P/E = Price ÷ Earnings — simple but affected by capital structure and taxes. EV/EBITDA = Enterprise Value ÷ EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) — enterprise-level, accounts for debt and excludes non-cash charges, making it better for comparing companies with different capital structures or across countries. Use P/E for quick valuations within an industry; use EV/EBITDA for deeper apples-to-apples comparisons where debt levels differ.

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## Portfolio & Features

**What portfolio analytics does FolioFundamentals provide?**
FolioFundamentals tracks portfolio performance against the S&P 500 benchmark in real time. Features include: total return vs. S&P 500, sector allocation breakdown with concentration risk flags, Fundamental Score for each holding, top winner and top loser by absolute gain/loss, and dividend income tracking.

**What financial data can I analyze?**
FolioFundamentals provides full financial statement history with visual charts: Income Statement (revenue, gross profit, net income, EPS), Balance Sheet (total assets, debt, equity), Cash Flow Statement (operating cash flow, free cash flow, capex), growth rates (revenue CAGR, net income CAGR, FCF CAGR), analyst consensus (buy/hold/sell ratings, price target upside), and earnings surprise history (actual vs. estimated EPS by quarter).

**How do I know if a stock is cheap right now?**
FolioFundamentals compares every valuation metric against the stock's own history going back up to 30 years. Metrics tracked include P/E ratio, dividend yield, FCF yield, P/S ratio, and market cap. If a stock's current P/E is 28x and its 10-year average is 22x, FolioFundamentals flags it as expensive vs. its own history. If it trades below its historical average, it flags as potentially undervalued. No manual calculation needed.

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Website: https://foliofundamentals.com
Support: support@foliofundamentals.com