Earnings
Of all the factors that can affect the price of a stock—perhaps the most important and straightforward is a company’s earnings.
If you were considering buying an existing business, you would review its accounting records to see multiple components. These include how much money the business made in the past year (and probably longer), how much it spent to operate, and how much money was left over—i.e., its profit. Investors who buy shares of publicly owned companies want the same information.
If you were considering buying an existing business, you would review its accounting records to see multiple components. These include how much money the business made in the past year (and probably longer), how much it spent to operate, and how much money was left over—i.e., its profit. Investors who buy shares of publicly owned companies want the same information.
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