Reece Stoj


Financial statements are a useful tool for judging the health of a company, and for comparing it to its competitors. They show what the company owes and owns, the profits or losses it has made over a given period, and how their position has changed since their last statement. Generally if you can tell which direction a company is heading in, you can also forecast future stock prices with some accuracy. Peter Leeds gives a great understanding of how these documents are defined and how they are read.

Gaining a basic knowledge of financial statements, and applying this knowledge when choosing or assessing investments can help you pick tomorrow’s winning stocks, while avoiding tomorrow’s losers.

Of course, financial statement analysis will not always factor in significant news events, unexpected incidents, changes in management, and other factors which may influence share prices, but it provides a starting point from which to gauge the present value of shares, independent of future occurrences.

The following report details some simple financial statement explanation and analysis methods. Although the topic can get much deeper and more complex, this article is designed to give investors the ability to understand the numbers and simpler of financial ratios, and be able to use that knowledge to assist them to make better decisions when doing their due diligence.

Balance Sheet

The balance sheet shows a company’s financial position at a specific date, usually the last day of the company’s fiscal year for annual reports. One side of the balance sheet shows what the company owns and has owing to it, called assets. The other side represents liabilities, which are what the company owes, and also has shareholders’ equity, which represents the excess of the company’s assets over its liabilities. Shareholder’s equity is often referred to as book value.

Total assets are equal to the sum of the company’s liabilities plus the shareholders’ equity. In other words, take away liabilities from assets and the remainder is what value is owned by the shareholders.

The Balance Sheet can be used to uncover the value of the company, the debt load, and cash position.

Earnings Statement

Also called the Income Statement or Profit and Loss Statement, it shows how much revenue a company received during the year from the sale of its products and services, and the expenses the company incurred due to wages, taxes, operating costs, etc… The difference between the two is the company’s profit or loss for the year. The amount left over after taxes is the net earnings.

Net earnings are basically saying how much money the company ‘really’ made over the course of the year. Some companies can have low earnings if they used much of their money for research and development, to acquire other companies, fuel aggressive growth, move into new markets, etc, which is much more favorable than if the company had low earnings because they didn’t generate many revenues, their expenses were too high, etc…

Statements of Changes in Financial Position

This shows how the company’s financial position changed from one year to the next. Also called the cash flow statement, this details how the company generated and spent its cash during the year.

This statement can be used in evaluating the liquidity and solvency of a company, and to assess the ability of that company to generate cash internally, to repay debts, to reinvest in itself, etc…

Sources of Financial Reports

Certainly you can get financials from the companies themselves. Most will gladly fax them to you, or mail you their latest quarterly and annual reports.

However, a faster way to access the information can be by Internet. For example, go to Yahoo.com and choose stock quotes. Enter the ticker symbol for the company you are interested in, and Yahoo will provide its most recent press releases, which will include past quarterly and annual reports with the financial statements. You can also check the previous reports to compare which direction the company is moving in and look for trends (i.e. increasing debt load, unpredictable earnings, decreasing revenues, erratic revenues, etc…).

There are also many other Internet resources which provide similar information, such as wsrn.com, bigcharts.com, (canada-stockwatch.com for Canadian issues), etc…

Comparison Shopping

To familiarize yourself with some of the numbers, try looking up the financials of three companies you own or are interested in.

(Balance Sheet) Which of the companies has the greatest long term debt load? Do any of the companies have greater current liabilities than current assets? Compare the current share price to the shareholder’s equity (book value): is the share price much greater or less than the book value?

(Earnings Statement) What were the revenues of the most recent year (or quarter) and does the number represent an increase or decrease from the previous period? How much money per share did the company earn (or lose) in the most recent period?

(Statement of Changes in Financial Position) Has company debt been increasing or decreasing? What was the greatest expense the company incurred according to the statement?

Decision Making

Understand that financial statements can provide investors with a partial fundamental snapshot of a company. They only represent one piece of the puzzle. Remember that, while financial statements can help investors compare several companies, comparison is limited only to the numbers provided.

In other words, you can see that one company made money while the other lost money, but you don’t know which has the better technical outlook (based on analysis of the trading chart), which is a potential takeover target, which will have the best future earnings, etc…

As well, the impact of financial statements tends to be long-term as it relates to share prices. Four quarterly reports showing increasing earnings may push the stock into an upward trend as the market begins to recognize the fundamental improvements of the underlying company, but one quarter of increasing earnings may or may not have a significant impact on shares.

Therefore, most investors use financial statements as part of a greater overall decision making process. Certainly, though, an understanding of and familiarization with the data can benefit any investor who takes the time to make educated trading decisions.

Important Points

Many growth companies don’t need nor are expected to have positive earnings. Instead, they generally accumulate debt as they focus on research and development of new technologies, aggressively move into new markets, fight for market share with competitors, etc… Other companies with minimal growth prospects on the other hand, have more importance placed on actual earnings, lowering operational costs, etc…

Be sure to understand what numbers are important and unimportant to a specific company based on their situation and the position they are in. This can be done easily by going to wsrn.com and doing an industry comparison on the company in question. Do companies in the same industry seem to have positive earnings, or is the focus on growth, research, etc… Are they a larger or smaller company than the industry average, and are they growing faster than the others?

Read the fine print to make sure the numbers you are reading have been audited, rather than being just company estimates, or unverified results. This generally is not something you need to worry about with most exchange-listed companies, but it is important practice.

Many annual statements will begin with positive news about sales or revenue increases, or other positive comments, but further reading reveals that the company actually lost more money, increased debt, or had a poor quarter or year. For most companies their financial statements are part of their promotional material and they need to make the information sound as impressive and positive as possible, even if the overall results were disappointing.

Be wary of one-time earnings or losses. For example, a company may win a huge lawsuit settlement and the influx of money gives them positive earnings for the quarter. However, how would they have done when the one-time extraordinary is ignored?

 

 

Stephen Campbell


“Teach a man to fish and he will never go hungry in his lifetime”

The proverb above can be perfect analogy for Business management. Precisely because, after you learn business management skills you can be certain that you will not be looking back, you will gain enough knowledge and confidence to manage your own business efficiently and effectively.

You will then acquire an insight into the effort and hard work you will have to have to put in your business, business management skills will, as always help you sail through any hardships you may be presented in the world of business management.

Effective business management needs planning and doing various activities at a time, but to do that you need to be fully knowledgeable in your respective field in details. You can also utilize business management books that are widely available online and off-line to help you gain learnings and expertise in this field. A business manager also has to understand business performance, the financial aspects of a business for without which he will bring no good for a business. Effective management needs to have creativity that is, with limited resources, can still extract development.

Creativity Management techniques

There are many strategies for enhancing creativity management. For instance, there are a number of methods of generating novel ideas, several methods of making diverse ideas, various methods of generating large numbers of ideas and several methods of elevating the frequency of idea generation.

But, it is of great significance to realize that techniques–although there may be thousands of them - are only one element of the creativity management process. Inside the scope of the creativity management framework, they fall in the creative thinking against critical thinking domain.

Can creativity be learned and enhanced?

Utilizing the scale of creativity: a)as a number of ideas generated, b) the variations of those ideas, c) the value of those ideas and d) the frequency of their production, we can scale creative output at any point in time.

After that, we can push individuals through a series of learning process, measure them again and find the + or - displacement.

Comprehending mechanisms such as the experience curve, adaptive and generative learning and automisation all show that creativity enhances with practice.

Once you are able to develop these creativity management, surely, you will be able to make good progress in your chosen business.

Sales and Marketing

Sales and marketing are usually used interchangeably, however, these are two different ideas, albeit somewhat similar. But, it is simple to determine between the two. Marketing is the method of attracting and keeping clients while sales is the actual selling of the product or services to the clients. In medium and large sized businesses, people designated for marketing and sales often do not work together, but it is critical to the success of a business for this to be so.

In small businesses, marketing and sales operations are commonly done by the same person, or the business owner. In such a case, there are no communication constrains because only one person is doing the work. The entrepreneur will always make sales and marketing together flawlessly because they are aware of everything that is happening and do not miss out on anything.

Matthew Browndorf


Browndorf PEM works as a full-service financial services firm. It provides a complete suite of financial management and growth products, including Wealth Advisory Services, Life Settlement Portfolios, Distressed Funds and Investment Banking services. To serve its customers seamlessly, Browndorf PEM leverages the potential of its highly professional team of legal, financial and ethical experts.

Browndorf PEM’s management team is led by Matthew C. Browndorf, Esq., the founding and managing member of Browndorf PEM. Before starting the company, Browndorf served as an attorney in Manhattan, New York, at Bryan Cave LLP and Buchanan Ingersoll PC, where he acted as the representative for security brokers and private clients in securities. He has got extensive knowledge in creditors’ rights and bankruptcy.

Jonathan T. Sadowsky is the managing director of finance and portfolio manager of all Browndorf PEM Funds. He previously worked as a fixed income hedge fund portfolio manager and researcher at Barclays Global Investors (BGI) in San Francisco, CA. His areas of expertise include corporate debt, asset valuation, credit default swaps (CDS) and total return swaps (TRS).

Other notable people in the team include Shadi Rafat and William K. Lundy. Shadi Rafat is the managing director of operations at Browndorf PEM and one of the original founders of Browndorf PEM. She leads Browndorf’s operations from every aspect. William K. Lundy is the managing director of investment banking services and an original member of Browndorf PEM. Lundy is specialized in bringing venture capital to emerging growth companies.

At the core of our business model is our close and fiduciary alignment with our private client investors, which are managed through our wealth advisory services and on the most trusted name in custody and clearing.  Through our wealth advisory services core springs the proprietary fund offerings managed by Browndorf PEM and the custom tailored independent offerings through our network of non-affiliated and independent Investment Banking Services - all of which are synergistically focused to meet the unique attributes of a sophisticated and demanding investor base.  With a high profile attorney at the helm, Matthew C. Browndorf, Esq., we have an ideal legal, ethical and compliance infrastructure to compliment our business acumen. Our management team members are highly vested in the company and our unique life settlement hedging strategy allows for insured investments along with alternative investments. We operate three divisions providing products and services:

Keto


Now where on the tax returns do we report our losses? Also, do we need to include these copies with our return? Are there ’special’ forms that we need to fill out? Is form 4797 needed?

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Pasi Kaarakainen


Did you know that over 90% of all internet home based businesses will fail? What this means to you is this is going to be hard to succeed with.

The first problem starts, because you do not know what you do not know. You’re going to have to learn things like e-mail marketing, how to use an autoresponder, search engine optimization, how to blog, and how to build a website. Then there is what products are you going to sell, how much you going to price it for, what his affiliate marketing, what is network marketing, and on and on we go.

Here is something else that will happen. You’re going to realize that you need help. So you’ll begin to read training manuals to watch videos on the Internet to go and dial up a webinar etc. etc.

In the meantime, you still have to try to make money. You suffer with all of the emails you have to reply to. You still have to go to forums and hang out learn there as well and maybe do some marketing there. You have articles to write and submit to article directories and post them in your blog.

Plus I have not even mentioned things like private label rights resell rights. Other things to do are a writing an e-book, doing a joint venture, creating your own product, and these type of things.

So here are 4 suggestions to help your internet home based business be successful and easy to operate.

1. Become a marketing spy. If you have a website and it is in the niche of cooking then go look at other cooking websites and see what they’re doing to be successful. There is no sense reinventing the wheel. When you can just make a few tweaks and a few changes and personalize it to your own liking you can make more money faster.

2. Automate your business. Start a WordPress blog, add a sign up form to it, and join a quality autoresponder like Aweber.

3. Spend your time on promoting your business. Busy work has killed more Internet businesses than almost anything else. By busy work, I mean looking at your stats to see if you made a dollar in Google ad sense, or checking your e-mail every 5 minutes.

And looking at your affiliate program stats, to reading the same discussion forum post over and over. These are not things that are going to help your internet home based business succeed.

4. The last thing I want to mention is have fun. Once you get used to it having a successful internet business in your home is really fun. What really makes it fun is when you do start to make money. If you have a product of your own that you can sell you’re really going to have a lot of fun because you get to keep all the profits.

In conclusion, hopefully these 4 Internet home based business tips will help you get off on the right foot, help you make money faster, and have more fun doing it.