IMF, stable investment returns even during financial crisis
The ultimate investment tip from the ultimate corporate analyst!

Stock markets are plummeting worldwide.
The economic news that pours out every day is hopeless.
None of the factors—rising U.S. interest rates, falling oil prices, slowing Chinese economic growth, or a currency war—are favorable for the stock market.
Individual investors are bound to be more vulnerable to these fluctuations.
According to a survey by an investment site that supports this situation, less than one in ten individual investors consistently generate profits.


Such market fluctuations have continued in the past.
The stock market also fluctuated violently during the foreign exchange crisis in the late 1990s and the global financial crisis in 2008.
What if there was a secret to consistently achieving annual returns of over 15% even during such turbulent times? Naver Power Blogger Pokhara Lee Kang-yeon, a 30-year financial statement analysis expert with 3,000 daily visitors seeking investment advice, emphasizes that the secret lies within the numbers in financial statements.
By understanding basic financial statement concepts and understanding the interconnectedness of the numbers, you can identify only the most promising companies that will remain unshaken even in times of crisis, thereby generating stable profits.
And all of these secrets have been revealed in the new book, "The Perfect Financial Statement Reading for Korean Stock Investors."

The current ratio is an indicator that can immediately identify liquidity problems.
A current ratio of 100 percent means that a company can repay its liabilities maturing within one year with its current assets.
Of course, paying off debt isn't the only thing you need to do.
You need to pay your employees and buy raw materials, so you need to have more cash than your debt service obligations.
So, if the current ratio is less than 100 percent, you can guess how difficult the company's financial situation is.
This is why, when checking the balance sheet, you should compare liabilities and assets simultaneously.
This is because if there is a mismatch between liabilities and assets (the maturities of liabilities and operating funds are different, so the accrual periods do not match), the company may suffer from structural financial difficulties.
If you finance long-term facility investments with short-term funds, there is a high probability that major problems will arise.
It is advisable to finance non-current assets with long-term non-current liabilities or equity capital.
In other words, financing must be done with liquidity in mind.
From page 32 [Current ratio that indicates risk of default]

Generally, when a company increases its capital, investors view it negatively.
However, paid-in capital increase should be interpreted differently depending on the purpose for which the company raises funds.
If a company increases its capital through paid-in capital increase for facility investment, it can be seen as a positive factor.
This is because if a company actively invests in facilities, it can expect an increase in future sales.
However, as the number of outstanding shares increases and the return on equity decreases, various profitability indicators decrease compared to before the capital increase.
However, since we expanded our facilities with capital increase money looking to the future, profitability will improve when sales increase.
On the other hand, a paid-in capital increase cannot be viewed positively in terms of securing operating funds.
While capital investment ensures future growth, operating funds are expendable funds needed to maintain the current situation.
Paid capital increase should be viewed differently depending on whether the investor's breathing is short-term or long-term.
If you are a short-term investor, it is best not to participate in the capital increase if the number of shares increases due to a paid-in capital increase, causing the stock price to fall and take time to recover.
If you are a long-term investor with the company's growth potential in mind, it is advisable to participate in a paid-in capital increase.
From page 189 [Paid capital increase with different interpretations depending on purpose]

Costs are largely composed of cost of goods sold and selling, general and administrative expenses.
Therefore, to calculate fixed and variable costs, you need to know these two cost structures.
Cost of sales and selling, general and administrative expenses can be found in the notes to the business report.
Cost of goods sold is the cost incurred in a factory when sales are made.
These cost of sales are broadly classified into four categories: labor costs, material costs, depreciation costs, and manufacturing expenses.
Among these, labor costs and depreciation costs are fixed costs, while material costs are variable costs.
Manufacturing costs are mostly variable costs, although there are some fixed costs.
Manufacturing costs such as electricity, water, and transportation costs increase proportionally as factory operating rates increase.
If expenses increase as sales increase, it is a variable cost.
On the other hand, salaries, retirement benefits, and welfare expenses are fixed costs that remain constant regardless of sales growth.
The same goes for travel expenses, entertainment expenses, transportation expenses, and communication expenses.
Selling expenses and general administrative expenses are back-office expenses, so most of them are fixed costs.
What about commissions? Commissions based on sales are variable costs.
This is because if you sell a lot through a dealership, the cost also increases.
Outsourcing processing costs are also variable costs.
The notes distinguish the nature of expenses by combining cost of sales, selling expenses, and general and administrative expenses.
This is an important table that allows you to determine fixed and variable costs relative to total costs, so be sure to check it out.
Typical fixed costs are employee salaries and depreciation.
Other items should also be classified as fixed costs.
This is because most of the expenses included in other items are small items such as selling expenses and general administrative expenses.
Page 286 [For fixed cost companies, sales growth rate is key]

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