๐ How to Analyze Quarterly Results?
๐ How to Analyze Quarterly Results?
Imagine your friend runs a juice shop ๐น and tells you every 3 months how his business is going:
โ๏ธ How many juices sold? ๐ฅค
โ๏ธ How much money made? ๐ฐ
โ๏ธ Any profit or loss? ๐๐
Companies also do the same โ they share their Quarterly Results โ like their 3-month report card! ๐๐ฏ
But how should you (as an investor) read and understand this? Letโs learn!
๐ฏ 1) Check Total Sales (Revenue) First ๐ต
โ๏ธ Is the company selling more than last quarter or last yearโs same quarter? ๐
โ
Sales growing = Business is expanding = Good sign! ๐
โ Sales falling = Company may be in trouble = Warning! โ ๏ธ
๐จ Example:
Juice shop sold 1,000 bottles last quarter โ this time 1,500 bottles โ wow! ๐
๐ฏ 2) Look at Net Profit (or Loss) ๐ฐ
โ๏ธ Is the company really earning money โ after all costs, taxes, expenses?
โ
Profit growing = Excellent! ๐
โ Loss = Something is wrong or temporary problem! ๐ง
๐จ Example:
Juice shop made โน50,000 profit last quarter, but this quarter only โน10,000 โ why so low? ๐ค
๐ฏ 3) Check Expenses and Costs ๐ธ
โ๏ธ Are costs rising too fast?
โ๏ธ Is raw material, salary, rent becoming expensive?
๐ If sales are flat but costs rising โ danger ahead! โ ๏ธ
๐จ Example:
Fruit prices doubled โ juice shop spent too much this quarter โ profit shrank! ๐๐
๐ฏ 4) Compare Quarter on Quarter (QoQ) and Year on Year (YoY) ๐
โ๏ธ QoQ (Quarter on Quarter): This quarter vs last quarter.
โ๏ธ YoY (Year on Year): This quarter vs same quarter last year.
๐ This shows if growth is seasonal or real!
๐จ Example:
Juice sales always low in winter โ comparing winter quarters makes sense! โ๏ธ๐น
๐ฏ 5) Margins Matter! ๐
โ๏ธ Operating Margin / Net Profit Margin โ is the company making good % profit on every โน1 sale?
โ
Higher margins = More efficient = Superb! ๐ฏ
โ Lower margins = Costly operations = Bad sign! โ ๏ธ
๐จ Example:
For every โน100 juice sold, profit is โน20 = 20% margin โ nice! ๐
๐ฏ 6) Check Debt and Interest Costs ๐ณ
โ๏ธ Is company paying too much loan interest?
โ๏ธ Is debt burden increasing?
๐ High interest = Less profit left for shareholders! ๐
๐จ Example:
Juice shop took big loan โ now paying โน10,000 interest every month โ profits squeezed!
๐ฏ 7) Look for "One-Time" Gains or Losses ๐ฒ
โ๏ธ Did company sell land or factory and show fake profit boost?
โ๏ธ Any big loss from fire, floods, strike?
๐ Ignore such one-time surprises while judging core business!
๐จ Example:
Juice shop sold old fridge for โน5,000 โ canโt count this as real profit forever! ๐
๐ฏ 8) Future Outlook (Guidance) ๐ฎ
โ๏ธ What did the company say about future plans?
โ๏ธ New products, new markets, challenges?
๐ฏ Positive future = Stock may rise ๐
โ ๏ธ Negative or unclear = Stay alert! ๐ง
๐จ Example:
Juice shop plans to open 5 new stalls next quarter โ awesome growth news! ๐
๐ Funny Tip:
Quarterly Results = Like checking the health report of a company every 3 months! ๐ฅ๐
โ๏ธ Healthy โ growing profits, sales? โ
โ๏ธ Sick โ rising costs, losses? โ
๐ In a Nutshell:
โ๏ธ Sales Growth? ๐
โ๏ธ Profit Growth? ๐ฐ
โ๏ธ Costs & Margins under control? ๐
โ๏ธ Low Debt? ๐ณ
โ๏ธ No fake gains/losses? ๐ฒ
โ๏ธ Bright Future Plans? ๐ฎ
๐ฏ Smart investors check all these before buying or holding stocks! ๐ต๏ธโโ๏ธ
๐ก "Before trusting a company with your money โ check its 3-month report card, just like a studentโs!" ๐๐