If you’ve ever tried to research a stock and bounced off a wall of P/E, ROCE, EBITDA and D/E within the first paragraph, this series is for you. Fundamental analysis isn’t actually hard — it’s mostly arithmetic on numbers a company is legally required to publish. What makes it feel hard is that nobody defines the jargon before using it, so every explanation assumes the five terms before it.

Jargon, Decoded fixes that one concept at a time: one post, one term, a definition, the formula, and a worked example — always against the same company, so you’re not relearning a new business every time.

The company

That company is Desi Bites Foods — a small, fictional, packaged namkeen and snacks manufacturer. One manufacturing unit, one product line, nothing exotic. It sells to distributors on credit, buys raw material on credit, and took a loan to build out its plant — which is to say, it has exactly the moving parts you need to make sense of a real balance sheet, income statement, and cash flow statement, without the complexity of a real company’s subsidiaries, segments, and footnotes getting in the way first.

It’s not a real company, and nothing about it is investment advice. Its full three-year financials — balance sheet, income statement, cash flow statement, all fully reconciled — live on the case study page. Every post in this series links back there instead of re-explaining the business from scratch, so it’s worth bookmarking.

How each post works

Once we’re past reading the three statements themselves, every post in this series follows the same shape:

  1. What the term means, in plain English.
  2. The formula.
  3. Calculated on Desi Bites — using the numbers from the case study, so you can follow along and check the arithmetic yourself.
  4. Calculated on a real, listed company — so you see it done on an actual filing, not just a tidy textbook example.
  5. Common mistakes — the ways people misread or misapply the number.
  6. A one-line takeaway.

Some posts also have an optional “explain it like I’m 10” box for anything genuinely non-obvious. Skip it if you don’t need it — it’s there for the concepts, not for padding.

Where to start

Before any ratio makes sense, you need to be able to read the three statements a ratio is built from. That’s the next three posts: reading a balance sheet, reading an income statement, and reading a cash flow statement — each one using Desi Bites as the example. After that, we get into the ratios themselves: profitability, efficiency, leverage, cash flow quality, and eventually valuation.

Takeaway: you don’t need to know twenty terms to start understanding a company’s financials — you need to know one term at a time, applied to one company you already understand. That’s the whole idea here.