Wondering how to read an earnings report and what to focus on?
Earnings are important and investors are clamoring to read the reports and make informed decisions on their holdings.
But it can be confusing to understand how one single quarter can be so important to a company with a lifetime of operations.
We break it down.
But first, here's an analogy.
Imagine you're about to buy a house. However, you've been operating at a deficit for the last several months and you lost your job. Your bank will likely wonder why it should lend you money.
Now, imagine you reveal new information to the bank: You've got a high paying job lined up and your financial situation looks strong for the future. Never mind the last few months.
Since the bank can now rely on you to produce steady and strong cash flows to pay down that mortgage debt, they'll invest in you.
That's how you read an earnings report.
It's all about 'What am I getting in the future by being in this stock?'
Now, to see the rest, watch the quick video above.
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