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Company & Industry Research Tutorial
This tutorial will take you through the steps to researching a company or industry.
10-K: annual filing with the Securities and Exchange Commission (SEC) for publicly traded companies. Financial statements and suporting details are provided. Form 10-K typically contains more financial information than the annual report to stockholders.
Acquisition: 1. the purchase of an item such as an asset or good. 2. the process of obtaining a controlling interest. 3. takeover of one business by another business.
Annual Report: an evaluation prepared by companies at the end of the reporting year, which might be either on a calendar or fiscal basis. Contained in the annual report are the company's financial statements including footnotes, supplementary schedules, management discussion and analysis of earnings, president's letter, audit report, and other explanatory data (e.g., research and marketing efforts) helpful in evaluating the entity's financial position and operating performance.
Asset turnover: net sales divided by total assets; also called total asset turnover. It measures how well assets are being used to generate sales revenue.
Current Ratio: the current assets divided by the current liabilities.
Leverage: a term commonly used in finance and accounting to describe the ability of fixed costs to magnify returns to a firm's owners.
Liquidity: the immediate convertibility of various assets into cash without significant loss of value.
Market Value the price at which an asset can be sold.
Merger: the combining of two or more entities into one through a purchase acquisition. It differs from a consolidation in that no new entity is created from a merger.
Parent company: a company that owns one or more companies and that may oversee and manage them.
Privately-held company: a company owned by a few people and is distinguished from a publicly-held corporation, which is also a private company, but whose shares are traded in the public market.
Profit Margin ratio of income to sales. Net profit margin equals net income divided by net sales. Gross profit margin equals gross profit divided by net sales.
Publicly-held company: an enterprise whose ownership is held by the general public, including individuals, officers, employees, and institutional investors. A publicly held company has stock listed on the exchange and must file financial statements and reports with the SEC.
Subsidiary company: a company in which a controlling interest in its stock is owned by another company, called the parent company.