How Can You Tell If a Company Is Profitable?
Some people will spend a lot of time doing research before they buy a new dishwasher or choose which model car they want to buy, but then when it comes to buying stocks, they don’t do any due diligence but buy what they heard about in a podcast or picked up in a social media post. It’s important to change your perception of what a stock is. A stock is linked to a physical business with offices and machines etc. Let’s say you had a dream about owning a small cozy cafe, and a café just like that was put for sale in a neighborhood nearby. Wouldn’t you want to investigate the business before you acquired it? What if it had a lot of debt or what if the business came out with a loss every year - you would want to know that. It’s the exact same thing with a stock. Though you can put less money into the company than if you had to purchase a café, and with a stock you can choose to only own one share of the whole business, you want to make sure it’s a healthy one. How to tell i...