What Does Company-Specific News Tell You about Companies?

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What Does Company-Specific News Tell You about Companies?

Investors can find valuable information on companies by reading about them in newspapers or online. Financial news reports can be a quick and readily accessible avenue of information for the busy investor.

For example, you might find an article discussing the corporation’s current financial outlook given recent economic or industry trends. You might even learn about a potential merger or takeover.

Important ratios found in the media

Newspaper or online earnings reports can provide various financial ratios. Ratios indicate the relationship between one aspect of a company’s finances and another. Following are some of the most common ratios:

• Current ratio measures a company’s liquidity.
• Price-to-earnings ratio measures a company’s stock value.
• Inventory turnover ratio measures how many times inventory turns over during a specific period.
• Operating profit margin ratio measures a company’s ability to control costs and expenses.
• Debt-to-equity ratio measures a company’s reliance on creditors.

Company-specific news can also identify a corporation’s share earnings and net sales. Net sales are the total of a company’s cash and credit sales minus any returns or discounts. Share earnings may reflect dividends and how net income increased these earnings.

Company summaries

Investors can learn the basics of a specific company by reading a company summary. Company summaries are brief explanations of company objectives, goals, products and services, history, and demographics such as the number of employees. Several financial and investor-oriented Websites make company summaries available.