Earnings Knowledge (1): 10 Minutes to Quickly Understand The Earnings
Hi mooers, the Q4 earnings season has arrived. Taiwan’s hot stock TSM has announced on its official website that they will release their Q4 earnings on January 14, and their earning call will be held in the afternoon. You can click the link below to make an appointment to attend the live broadcast.
Before this, in order for everyone to interpret the earnings and earnings call more clearly, this article will answer the following questions in detail.
What is the earnings and earnings call?
The earnings is a summary report of multiple financial statements used to reflect the company's economic behavior within a specified period of time. And the earning call provides investors with zero-distance contact with the company.
Why do I need to read the earnings?
To buy a company’s stock is to invest in a company. We need to understand the operating conditions of a company, estimate the value of the company, and judge whether it is worth buying. There are many factors that affect the development potential of an enterprise, and the earnings provides an analysis sample. Through the earnings information, stock market traders can have a general understanding of the company's main business and changes, financial status, and data performance.
How to evaluate a company through earnings?
Through the earnings and earning call to understand the company's business model, financial situation and corporate status.
1. Business model
From the proportion of the company's turnover, we can see the company's main business and pillar services, then we can understand the performance of these businesses.
Before this, in order for everyone to interpret the earnings and earnings call more clearly, this article will answer the following questions in detail.
What is the earnings and earnings call?
The earnings is a summary report of multiple financial statements used to reflect the company's economic behavior within a specified period of time. And the earning call provides investors with zero-distance contact with the company.
Why do I need to read the earnings?
To buy a company’s stock is to invest in a company. We need to understand the operating conditions of a company, estimate the value of the company, and judge whether it is worth buying. There are many factors that affect the development potential of an enterprise, and the earnings provides an analysis sample. Through the earnings information, stock market traders can have a general understanding of the company's main business and changes, financial status, and data performance.
How to evaluate a company through earnings?
Through the earnings and earning call to understand the company's business model, financial situation and corporate status.
1. Business model
From the proportion of the company's turnover, we can see the company's main business and pillar services, then we can understand the performance of these businesses.
For example, TSM’s Q3 earnings, as can be seen from the above figure, smartphones and high-performance computing are TSM’s core businesses, and its revenue accounted for 46% and 37%. Among them, the proportion of revenue from smartphones ranks first stably, and the proportion of revenue from high-performance computing has a relatively large growth rate.
2. Enterprise status
Understanding the company's operating conditions and financial statements from the three major statements is the most critical value. The three major statements include balance sheet, income statement and cash flow statement.
2. Enterprise status
Understanding the company's operating conditions and financial statements from the three major statements is the most critical value. The three major statements include balance sheet, income statement and cash flow statement.
For example, it can be seen from TSM’s cash flow statement that its net cash flow is positive, and it has increased by more than 200% compared to Q2. Driven by strong demand for the iPhone 12 series and large shipments of A14 processors, TSM’s revenue in Q4 is also expected to exceed their expectations.
3. Financial status
The three major statements of the company's earnings can reflect the company's profitability and debt status, thereby helping investors to estimate the profit that can be shared, and financial institutions judge the company's debt repayment ability.
TSM has announced the revenue for the first two months of the Q4. If the revenue of December exceeds the average level of the previous two months, then Q4's revenue will exceed 13 billion U.S. dollars, setting a new high again.
Summary
The earnings provides a way of business analysis. Investors can find answers or clues in the company's earnings.
$Taiwan Semiconductor (TSM.US)$
3. Financial status
The three major statements of the company's earnings can reflect the company's profitability and debt status, thereby helping investors to estimate the profit that can be shared, and financial institutions judge the company's debt repayment ability.
TSM has announced the revenue for the first two months of the Q4. If the revenue of December exceeds the average level of the previous two months, then Q4's revenue will exceed 13 billion U.S. dollars, setting a new high again.
Summary
The earnings provides a way of business analysis. Investors can find answers or clues in the company's earnings.
$Taiwan Semiconductor (TSM.US)$
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