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 Elite Fitness Bodybuilding, Anabolics, Diet, Life Extension, Wellness, Supplements, and Training Boards
 Chat & Conversation
 For Financial Buffs...
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| Author | Topic: For Financial Buffs... | ||
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Amateur Bodybuilder 
Posts: 219 |
I am evaluating 2 companies. I need to access which company has an overall better financial performance. I have income statements and balance sheets from both companies. What are the keys things to look at when comparing these 2 companies?    | ||
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Amateur Bodybuilder
Posts: 267 |
I'd say retained earnings off the top of my head. Been a while since my accounting classes... ------------------  | ||
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Amateur Bodybuilder
Posts: 212 |
These are what you need to compare when doing a financial analysis. Profit Margin ------------------ - Kwai-Chang Caine | ||
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Novice 
Posts: 4 |
Kwia covered most of the basics. If the companies are publicly traded check out earnings per share and the P/E ratio as well. Keep in mind that the Balance Sheet is reflective of the company's position at that particular time, kind of like a snap shot of the company at that moment in time. It's best to compare the company's performance over several years to develop an idea of how they are performing over time. Ditto with the Income Statement. You should also compare the company's performance to that of it's peers. I suggest you go to MSN's money site or one of the others that offer free research. You can view performance charts, financial ratio's and some also provide analysts recommendations. | ||
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Amateur Bodybuilder
Posts: 239 |
suspension...kwai chang listed many relevant performance measures to consider, however I have to infer from the nature of your question that you are not really proficient at analyzing financial statements so most of the above mentioned performance measures will be basically useless. I would recommend reading some finacial analyses on the companies you have in mind that have been written by analysts. It will save you the time of trying to pour over the financial statements yourself. Don't be "fooled" by alot of financial ratios etc. they look good but 1)many people do not really understand them 2)remember!! the market is efficiently priced (most of the time) so true arbitrage opportunities rarely exist (i.e. very few professional analysts can consistently beat the market (compare returns of equity mutual funds to an S&P 500 index) so don't delude yourself into thinking that you can "out analyze" professionals who do it every day. My advice: Buy "solid" companies and hold for the long term. Good luck. ------------------ | ||
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Amateur Bodybuilder
Posts: 267 |
If you are going to mathematically calculate those ratios (or even analyze them assuming someone else has already done that for you), you will need baselines and industry standard figures for each of those figures. Otherwise you will have a bunch of arbitrary numbers with no backdrop against which to judge if they're "good" numbers or not. ------------------ |
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Ultimate Bulletin Board 5.45c
posted March 07, 2001 05:26 PM
