1. What Does the Company Do?
This first basic question that should come to your mind is what does the company do? To find the answer just check the company’s website so that a lot of details about the company business will be clear to you.
2.Is the Company Profitable?
This is also a simple question, which can be made more complicated by all sorts of variations on a company’s earnings. Investors should read the quarterly and annual earnings reports to check out how much net income the company reported.
3. What Is the Company’s Earnings History?
A quick scan of older news stories and the company’s past quarterly statements help answer this question.
4. How Richly Is the Company’s Stock Valued?
It’s wonderful to find a company whose earnings are growing exponentially, but the other side of the equation is the value the market pays for that growth and the prospect of future growth.
5. Who Are the Company’s Competitors?
There will always be competitors in the business but you have to get assured that this company will not only able to sustain the competition but also increase the market share.
6. Who Runs the Company?
Unlike professional money managers, individual investors don’t have the ability to drop by a company’s headquarters and chat up the management before making an investment decision. However, that doesn’t mean there aren’t plenty of ways to find out about the leadership. Any decent company will have a Web site that lists the senior managers, how long they have been with the company, their background and the company’s history.
7. How Clean Is the Company’s Balance Sheet?
Long-term investors should read over a company’s balance sheet to check if the company saddled with a huge amount of debt compared with how much it earns?
8.Scope of the Sector in which the Company does Business?
It is very important to understand the scenario of the sector,whether the sector is an emerging sector.
9.Prospects of the Company for the future?
You should have a fair amount of idea about the prospectus of the company,should check the recent past management interviews to get a basic idea about prospectus.
10.Expansion projects if any? if yes when will it be commissioned?
Expansion projects increase the company’s revenue and profit and have the potential for manifold returns.
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