To succeed in a complicated stock market game, investor should learn the basic facts of the company they want to invest in, before they are risking their money.
Here are some basic investors should know about the chosen company’s stocks:
- Learn on how much REVENUES the company makes
Although still in the early development stage (in which there’s maybe no revenues to offer), some companies have been in the market for years. That makes them have a sum of revenues to cover some losses and costs.
- Learn how much EARNINGS does the company makes
Earnings are the extra money the company makes. That wouldn’t be used in covering expenses. Companies with large earnings have an advantage in the stock market.
- Learn if the company has BAD DEBT, if so, how much?
Buying stocks from bad debt companies would be risky. Paying the debts plus the interest will put the company into instability.
- Learn how much ASSETS the company owns
This means how much cash, receivables, inventory, property, businesses and other assets owned by the company. Knowing all those facts will give investor an understanding of the company’s position in the industry. Investor can safely trust a company with significant assets.
- Learn how much is the FINANCIAL RESPONSIBILITY the company have
Investor should know how much is the payables the company need to pay out. When the value of their financial obligations is low, the company isn’t in danger of becoming in debt. Comparing the company liabilities and assets could help investor determining if they need to buy the company’s stocks. Make sure that the assets of the companies are always higher than their financial responsibilities.
At the end, just remember, unlike gambling, investing means investor should learn and do research on the company they want to buy its stocks. Make sure investor knows the company’s background to ensure that the money being invested is in the right hands.
