Fundamental ratio analysis is an investment approach that focuses on specific relationships, or ratios, of the financial data of a company. This method offers a "snap shot" of a company's value, where the analysis is a review of a firm's financial report. Recognizing the importance of these relationships and ratios, the Investment Account Manager provides the investor with a comprehensive set of variables that can be used to derive informative ratios that may be helpful in discovering undervalued securities.

If using one of the data subscription services (QuoteMedia Data Service) the required data can be automatically downloaded. If not, fundamental data can also be manually entered into IAM.  Regardless, prior to using the valuation ratios provided by Investment Account Manager, you'll want to be certain you've updated your Current Asset Library asset library to reflect up to date data.

The following fundamental ratios will be derived using the data in the Current Asset Library: These ratios are displayed on the Asset Library Menu | Current Asset library | Valuation Ratios tab. Additionally, the Fundamentals tab found on IAM's Home Page which also displays this information for the open portfolio.

Investment Account Manager will find valuable fundamental analysis information on the programs many different reports including:


In summary, valuation ratios provide important insights into the financial strength of a company. In the case of dividend ratios, investors can identify the current fortunes of a company, while determining investment suitability on an individual basis. While there are strong arguments both in favor of dividend-paying stocks (such as providing a price-floor based on yield) and non dividend-paying stocks (such as the ability to grow faster since all earnings are being plowed back into itself), investors should serious consider the many benefits of diversifying across a variety of stocks by sector as well as by varying degrees of dividend policies. Additionally, when investing in dividend paying stocks, keep an eye on the future. It is expectations of future dividends (and earnings and cash flows to support future dividends) that offer a clue on future stock price performance. In the case of earnings-based ratios, these too provide useful measurements. However, in the case of earnings, many outside factors can creep into "accounting earnings" that may or may not result in a reliable estimate of "economic earnings". The important point, then, is to be confident in the data source(s) you're using for your earnings estimates; simply stated... garbage in — garbage out.

Within IAM users can sort the fundamental analysis data, ascending or descending, by any column of data. Simply move your mouse pointer to the header of the column. You will the appearance will change to an arrow. Double click to sort.

Here we have sorted on dividend yield, highest to lowest:

  1. Free Cash Flow: AAII Journal, Common Stock Analysis: Examining Cash Flow, May 1990. Formula Reprint: AAII, March/April 1991, pg. 5.
  2. Dividends Count: Screening for Undervalued Stocks with Lower Risk: AAII Journal, Stock Screening, October 2002, pg. 13.
  3. Guidelines in the Use of the P/E Ratio: Investments, An Introduction to Analysis and Management, Frederick Amling, Prentice Hall, pg. 527.
  4. Current P/E Ratio ÷ EPS Growth Rate: One Up On Wall Street, Peter Lynch, Penquin Books, 1989, pg. 198.
  5. Repair Shop: Better Investing, October 2001, pg. 16.
  6. Return on Cash Flow: One Up On Wall Street, Peter Lynch, Penquin Books, 1989, pg. 214.