Your an analyst for an investment company. a company (abc co.)approaches your in
ID: 2476886 • Letter: Y
Question
Your an analyst for an investment company. a company (abc co.)approaches your investment company looking for a stock investment and your boss wants you to do some extra analysis deciding whether or not to make the investment. Your boss had provided you with abc co.'s financial statements( income statements, balence sheets, and statement of cash flows) your job is to perform an analysis of the company and make a recommendation to your boss on whether or not to invest.
what are the key things that I need to look at in these records in order to make a good analysis of this company? please help! thank you!
Explanation / Answer
Key things to look at:
1. Is the company profitable
2. What is the revenue and revenue history, growth rate of business
3. Debt equity ratio - how clean is the balance sheet, whether company has huge debts for equity
4. Profit margins, ratios
5. Price earning ratios
6. return on equity
7. Current ratios
8. Interest covergae ration, in case of debts
9. Asset turnover ration
10. Dividend yield and payout
11. Reserves situation, total shareholders equity
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