12 September 2025
TIP752: Financial Statements Explained Simply w/ Brian Feroldi
We Study Billionaires - The Investor’s Podcast Network
About
On today's episode, Clay brings back long-time guest, Brian Feroldi, to educate our listeners on how to analyze financial statements.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
01:58 - An overview of the three financial statements.
13:11 - What GAAP accounting is and why the US is a good environment for investors from a regulatory perspective.
18:08 - Why Brian prefers that companies pay employees in cash rather than through stock based compensation.
30:29 - Why each dollar should be treated differently when analyzing different businesses.
37:20 - The role of financial statements in estimating a company’s intrinsic value.
37:20 - Why the P/E ratio is a useless valuation metric for growth businesses.
40:33 - Why Brian prioritizes optionality in his investment process.
43:26 - Red flags to look out for in the financial statements.
58:02 - What David Gardner taught Brian about investing.
01:01:41 - Why good investing is all about marrying the right side of your brain with the left side of your brain.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here.
Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Check out more financial statement visuals here.
Check out Long-Term Mindset.
Related Episode: TIP437: Why does the Stock Market Go Up? w/ Brian Feroldi.
Follow Brian on LinkedIn & X.
Follow Clay on LinkedIn & X.
Check out all the books mentioned and discussed in our podcast episodes here.
Enjoy ad-free episodes when you subscribe to our Premium Feed.
NEW TO THE SHOW?
Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
Check out our We Study Billionaires Starter Packs.
Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Learn how to better start, manage, and grow your business with the best business podcasts.
SPONSORS
Support our free podcast by supporting our sponsors:
SimpleMining
HardBlock
AnchorWatch
Human Rights Foundation
Linkedin Talent Solutions
Vanta
Unchained
Onramp
Netsuite
Shopify
HELP US OUT!
Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Learn more about your ad choices. Visit megaphone.fm/adchoices
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
01:58 - An overview of the three financial statements.
13:11 - What GAAP accounting is and why the US is a good environment for investors from a regulatory perspective.
18:08 - Why Brian prefers that companies pay employees in cash rather than through stock based compensation.
30:29 - Why each dollar should be treated differently when analyzing different businesses.
37:20 - The role of financial statements in estimating a company’s intrinsic value.
37:20 - Why the P/E ratio is a useless valuation metric for growth businesses.
40:33 - Why Brian prioritizes optionality in his investment process.
43:26 - Red flags to look out for in the financial statements.
58:02 - What David Gardner taught Brian about investing.
01:01:41 - Why good investing is all about marrying the right side of your brain with the left side of your brain.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here.
Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Check out more financial statement visuals here.
Check out Long-Term Mindset.
Related Episode: TIP437: Why does the Stock Market Go Up? w/ Brian Feroldi.
Follow Brian on LinkedIn & X.
Follow Clay on LinkedIn & X.
Check out all the books mentioned and discussed in our podcast episodes here.
Enjoy ad-free episodes when you subscribe to our Premium Feed.
NEW TO THE SHOW?
Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
Check out our We Study Billionaires Starter Packs.
Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Learn how to better start, manage, and grow your business with the best business podcasts.
SPONSORS
Support our free podcast by supporting our sponsors:
SimpleMining
HardBlock
AnchorWatch
Human Rights Foundation
Linkedin Talent Solutions
Vanta
Unchained
Onramp
Netsuite
Shopify
HELP US OUT!
Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm
Learn more about your ad choices. Visit megaphone.fm/adchoices
Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm