Growth Situations

When you are trying to discover if a company is or not in an asset situation, we usually center on the balance, but if what we have to seek is if the company is or not in a growth situation; we go to the results account.

In the assets situation we focus basically in what the company possessed, that is, in its elements of wealth. Well, when we analyze growth situations the things get more complicated, due that we have to look towards the future. To find a growth situation in a determined company you will have to observe the evolution of the sales and of the profits, and basing on the passed trajectory, to predict what will happen in the future.

When analyzing growth situations, you have to form an opinion about the movement’s capacity to reach the established goals, and not to limit yourself to just studying the balance sheet items such as the cash money in banks, negotiable securities on the market or the real estate.

To complicate more this business, many companies in growth situations are characterized for having a very mediocre balance due that they are forcing the use of assets to attend the demands of their products or services.

To determine if a company constitutes a good investment, you must calculate the profitability of its own funds and that of its total assets, the growth rate of the dividend and of the profits and the quotient quotation / benefits.

Beginner Money Investing The Stock Exchange Contracting Mechanism Growth and Securities Growth Situations Negotiation Unities Stock Market Dividends Accrued Interests & Monthly Account Statement