week 6 homework things you need to know before investing

Understanding Business

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Invest 1 Things to know before making an investment Amanda Roberts Professor Davis Searle Understanding Business April 3, 2010
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Invest 2 Things to know before making an investment. Investing your money is a very big step. First you would need to find out a little bit about the company you are thinking about investing in. These are a few questions I would be asking: How long has it been in business, has it been successful, what kind of business is it, what industry it is in, and what are some of their basic business strategies? These answers can be found by researching the company on the internet, or by contacting the company itself. As a potential investor I would want to see the company’s financial statements so I could see first hand for myself where the company’s strengths and weakness’ are financially. This would show me if this is a good investment or if it would be risky. This would include their balance sheets, income statements, shareholders equity statements, and cash flow statements. You need to do this for a minimum of 3 years and up to five years. Depending on the type of investment and how much money you are thinking about investing. You would first scan these statements. I would be looking for large profit or losses from year to year. If something does not look right research it find out if the company was going through any changes that would cause the profit or loss. Such as: did the company open up a new division, or did the company sell part of its company that
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