The IABC Handbook of Organizational Communication: A Guide to Internal Communication, Public Relations, Marketing, and Leadership

The Numbers

Investors typically use a variety of quantitative tools to determine a valuation, or appropriate market worth, of a company's stock. Investors carefully study a company's fundamentals: the income statement (a summary of revenues, costs, and earnings during a specific time period), the balance sheet (a financial report that shows a company's assets, liabilities, and owners' equity on a given date), and the cash flow statements (reports that analyze changes in the company's cash position). In reviewing these reports, investors make judgments on positive or negative trends that may be emerging. A company's revenues and net income may be growing, for example, but its profit margin (its gross profit divided by sales) may be declining, ...