Recovered from the holiday?! 🥛
Good morning, friends! ✨
It's time to get back on track after the holiday break because we're returning to the business arena – and for that, we've prepared a champions' "soft landing" for you! 🛫
It's time to level up as business people:
What is the most important thing for investors? 🚩
Financial reports! 🔝
Today we will understand how to read a company's financial reports – even if you don't have an economics degree! 🎓
Let's begin! ⚡️
📈 The quarterly report has arrived – and you don't understand anything?
Revenue, EBITDA, GAAP, Adjusted, profit line, diluted earnings… 😵
So here's everything you need to know that will definitely bring you the order you so desperately need! ✔️
🧠 First of all – why is it important?
Because the market reacts to reports!
And more importantly – a company's value is determined by its performance.
In simple words – whoever doesn't know how to read reports – invests with their eyes closed! 👨🦽
1️⃣ The first line – Revenue / Sales
How much money did the company actually bring in?! 📊
Note: Is there growth compared to the previous quarter or compared to last year? 🪧
Growth = ✔️ Decline = ⚠️
2️⃣ The truly important line – Net Income
This means – how much money is left after all expenses, taxes, and interest. 🔎
- Is the company making a profit or a loss? ⚪️
- Is there year-over-year improvement? ⚪️
And why is this so important? ❓
Sometimes high revenues are seen due to accounting tricks – but in reality – the company is actually losing money! ❌
3️⃣ Earnings per share – EPS How much profit (or loss) per share
The market loves positive surprises,
📊 If actual EPS is higher than expectations → the stock may rise.
🧨 If EPS is lower than forecasts - declines are on the way...
4️⃣ Cash Flow
This is not how much the company earned – but how much actual cash entered and left the business! 🤑
A company can "profit on paper" but collapse – because it doesn't have money to pay suppliers. 🛫
In the report – look for: 🔼 Positive operating cash flow 🔽 Negative cash flow over time = red flag
5️⃣ Forward guidance
Listen very carefully and also pay attention to the nuances of what the company says about the future! 🔮
For example - "we expect an additional $1.5 billion in revenue next quarter" - this is an important indication! ⚡️
Often the stock reacts to guidance – rather than current performance. 🔮
In summary! ✏️
🔍 You don't need to be an accountant to understand:
- Are revenues growing? ❓
- Is the company profitable? ❓
- Does the company have positive cash flow? ❓
- And what is the company's outlook for the future? ❓
And this is what truly matters – because ultimately, a stock is just a relative ownership certificate in a business. 💼
Don't buy stocks thinking you are "buying stocks"...
You are not buying stocks - you are buying businesses! 🛍
Learn to look at the inside – the report and guidance are the beating heart of the business! ❤️🔥