Course Content
Introduction
The stock market is a marketplace where shares of publicly listed companies are bought and sold. It plays a central role in the modern economy, acting as a bridge between businesses that need capital and investors who have money to invest. The origins of the stock market trace back to the early 1600s, when the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. This allowed the company to raise money from the public to fund its trade ventures, in return for a share of the profits. Over time, this concept evolved, and today, stock markets exist all over the world, with major exchanges like the New York Stock Exchange (NYSE), NASDAQ, and London Stock Exchange facilitating trillions of dollars in trade. At its core, the stock market enables businesses to grow. By offering shares to the public through a process called an Initial Public Offering (IPO), companies can raise large amounts of money to expand operations, invest in research, or develop new products—without having to rely solely on banks or private lenders. In return, investors get the opportunity to share in the company’s success through rising share prices and dividends. Investing in the stock market can be a powerful way to build wealth over time. Wise investments in strong companies can generate solid returns, especially when held for the long term. Many individuals have grown their savings substantially by investing in companies that have thrived. However, it’s important to remember that the stock market carries risks. Prices can go up, but they can also go down—sometimes sharply. Economic downturns, company mismanagement, or shifts in the global market can all lead to losses. For beginners, it's essential to approach investing with caution, avoid chasing “get rich quick” schemes, and take the time to understand what you're investing in. In short, the stock market is a powerful tool for economic growth and personal financial development—but like all tools, it must be used wisely.
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Introduction
Stock Markets Around The World
Listing On A Stock Market
How Stocks are Bought and Sold
Trade Date vs Settlement Date, What is T + 2?
What Is A Stock Market Index?
ETF’s and Index Funds
Fundamental Analysis
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Fundamental Analysis Introduction
Understanding Revenue and Profit
Earnings Per Share and PE Ratio
Understanding the Balance Sheet
Understanding Cashflow
Dividends – How Investors Earn Income From Their Shares
What Causes Stock Prices To Rise And Fall
Understanding Market Capitalization
Technical Analysis
Along with Fundamental Analysis, Investors increasingly rely on Technical Analysis to decide whether to buy or sell a stock. Here we will explore the main techniques.
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Introduction to Technical Analysis
How To Read A Price Chart – The Basics
Understanding Support and Resistance Levels
Identifying Trends and Drawing Trendlines
Understanding Moving Averages
Introduction to Momentum Indicators
Chart Patterns – Spotting Setups in the Market
Volume – The Power Behind a Price Movement
Investing Safely and Profitably
How do professionals invest safely and profitably? Some key concepts such as position sizing and stop losses.
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How To Place Trades And Manage Risk
Using A Trailing Stop To Protect Profits and Limit Loss
Diversification and Portfolio Management
Taking Profits
Common Investor Mistakes And How To Avoid Them
A Quick Word On Taxes
Summary and Beginner’s Checklist
10 Must Read Books for Investors and Traders
Beginners guide to investing in the Stock Market

Understanding Cashflow

 

After the Profit and Loss and Balance Sheet, the next most important financial document is the Cashflow Statement.

 

While profit shows whether a company is making money on paper, cash flow reveals whether it’s actually bringing in real cash — and whether it can pay its bills, fund growth, and survive hard times.

 

A company can show strong profits but still run out of cash. That’s why understanding cash flow is crucial for investors.

 

 

What Is Cash Flow?

 

Cash flow simply means the movement of money in and out of a business.
It’s recorded in a financial statement called the Cash Flow Statement, which is divided into three main parts:

 

 

1. Operating Cash Flow

This shows how much cash is generated from the company’s core business activities — the sale of goods or services.

 

Key Questions:

  • Is the company’s everyday business generating more cash than it spends?

  • Is this number growing year over year?

 

Example:
A retailer receives $10 million from customers and spends $7 million on staff, suppliers, and rent.
Operating Cash Flow = $3 million (positive).

 

This is the most important section — it reflects how strong and self-sustaining the business is.

 

 

2. Investing Cash Flow

 

This includes cash spent on or received from long-term assets like:

  • Buying or selling equipment

  • Purchasing property or other businesses

  • Investing in new technology

 

A negative investing cash flow is common in growing companies and isn’t necessarily bad — it might mean the company is reinvesting in itself.

 

A positive number may mean the company is selling off assets, which could be a warning sign.

 

 

3. Financing Cash Flow

 

This tracks cash coming from or going to investors and lenders, such as:

  • Issuing or repurchasing shares

  • Taking on or repaying loans

  • Paying dividends

 

A negative number may mean the company is paying down debt or rewarding shareholders.


A positive number may mean it’s borrowing money or issuing new stock to raise funds.

 

 

Why Is Cash Flow Important?

 

  • It shows how liquid the business is — how easily it can meet its short-term obligations.

  • It reveals whether profits are real and sustainable.

  • It helps identify companies that might look good on paper, but are burning through cash.

 

 

Free Cash Flow (FCF)

 

One key figure to know is Free Cash Flow:

Free Cash Flow = Operating Cash Flow – Capital Expenditures

 

It shows how much cash is left over after the company invests in its operations.
Free cash flow can be used to:

  • Pay dividends

  • Reduce debt

  • Reinvest in the business

  • Buy back shares

 

Growing Free Cash Flow is often a strong signal of a healthy, profitable business.

 

Cash flow reveals the real financial heartbeat of a business. A company might show accounting profits but be running low on cash — a serious red flag.


By studying the Cash Flow Statement, especially operating and free cash flow, investors can tell whether a company is truly strong and self-sustaining.

 

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Stock Market Course