There are several indicators you can look at to gauge how well a company is doing. Here’s a breakdown of some key financial and non-financial factors to consider:

Financial Performance:

• Revenue Growth: A company’s revenue growth indicates its ability to generate sales and increase its top line. Consistent growth suggests a healthy business.
• Profitability: Profitability refers to a company’s ability to generate profit after accounting for all expenses. Look for metrics like net profit margin or earnings per share (EPS) to assess profitability.
• Cash Flow: Cash flow refers to the movement of cash in and out of a business. A healthy company should have positive cash flow, indicating it has enough cash to cover its operational needs and invest in growth.
• Debt-to-Equity Ratio: This ratio compares a company’s total liabilities (debt) to its shareholders’ equity. A lower ratio indicates a company is less reliant on debt to finance its operations, which can be a sign of financial stability.

Financial Statements:

• Balance Sheet: Provides a snapshot of a company’s assets, liabilities, and shareholders’ equity at a specific point in time.
• Income Statement: Shows a company’s revenues, expenses, and net profit over a specific period.
• Cash Flow Statement: Details the cash inflows and outflows from operating, investing, and financing activities.

Market Performance:

• Stock Price: A rising stock price can indicate investor confidence in a company’s future prospects.
• Market Share: A company’s market share reflects its position in its industry. A growing market share suggests the company is outperforming its competitors.

Non-Financial Indicators:

• Customer Satisfaction: Positive customer reviews, high retention rates, and strong brand reputation can all be signs of a well-run company.
• Product Innovation: A company’s ability to develop and launch new products can indicate its potential for future growth.
• Employee Satisfaction: A happy and productive workforce can contribute to a company’s overall success.

Additional Considerations:

• The relative importance of each factor can vary depending on the industry, company size, and stage of growth.
• It’s often beneficial to analyze trends over time rather than just focusing on a single data point.
• Financial news and analysis reports can provide valuable insights into a company’s performance.

By considering these financial and non-financial factors, you can get a better understanding of how well a company is doing and its potential for future success. However, it’s important to remember that financial analysis can be complex, and consulting with a financial professional is recommended for making informed investment decisions.

Sources:

Reddit – Beginner Investor Should Know These Financial Terms