The Stocks and Savings Podcast 118. The 7 Most Important Numbers When Analysing a Stock
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Aug 20, 2025 Explore the seven key financial metrics that every investor should know! Discover how market capitalization and revenue growth shape your understanding of a company’s potential. Dive into the importance of free cash flow for assessing financial health, and learn about the balance of cash reserves and debt. Get insights on crucial valuation metrics like the P-E ratio and enterprise value. This episode simplifies stock analysis for both newbies and seasoned investors, emphasizing the blend of numbers with broader qualitative research.
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Market Cap Reveals Company Size
- Market capitalization gives an immediate sense of a company's size and market-perceived value.
- Use market cap categories to gauge relative risk from micro to mega caps.
Prioritize Consistent Revenue Growth
- Check revenue growth to judge momentum and future potential rather than absolute size.
- Prefer consistent growth and compare rates to industry norms when evaluating companies.
Gross Margin Shows Core Profitability
- Gross profit margin shows how much revenue a company keeps after direct costs.
- Compare margins to industry peers and watch trend direction for pricing or cost pressure signs.