The stocks of some companies are purchased because of the company’s profitability. As this is written, in the fashion world, Michael Kors or Signet Jewelers are examples that come to mind and that might fit into this category. The stocks of other companies are purchased for their growth potential. Coach/Tapestry or Luxxotica are fashion oriented companies that may fit into this category. Why do some people prefer a mature company with profitable history instead of a company with perhaps less current profit but stronger growth potential? Why? Please make the why part substantive - explain your reasoning.
The stocks of some companies are purchased because of the company’s profitability. As this is written, in the fashion world, Michael Kors or Signet Jewelers are examples that come to mind and that might fit into this category. The stocks of other companies are purchased for their growth potential. Coach/Tapestry or Luxxotica are fashion oriented companies that may fit into this category.
Why do some people prefer a mature company with profitable history instead of a company with perhaps less current profit but stronger growth potential? Why? Please make the why part substantive - explain your reasoning.
When investing in the stock market, one has to look at too many different things, because judging a particular stock based only on a single parameter might always not work.
Stock investing necessitates a thorough examination of financial data to determine a company's genuine value. This is usually done by looking at the profit and loss account, balance sheet, and cash flow statement of the company. This can take a long time and be inconvenient. Examining a company's financial ratios, the majority of which are freely available on the Internet, is a simpler approach to learn about its performance.
When it comes to investment decisions, ratio analysis is critical. It not only allows investors to see how the firm has performed but also allows them to compare companies in the same industry and choose the best investment option.
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