How to read economic calendars?
Obviously, news, announcements, releases and other current data updates influence trading terms and prices. This is why it is important to be in a picture of any economic changes. As an example of information, being noted before taking any decision in respect of future deals, serves Companies’ financial statements. IQ Option gives opportunity for financial information monitoring regarding companies, which shares are represented on market via earning calendars.
What should be monitored?
Companies, listed on external stock exchanges, are obligated to publish financial statements together with respective calculations and related announced changes in operating process or management positions replacements. What should be considered for global understanding of coming trends in respect of selected company:
1) Balance sheet. Main performance indicators to be analyzed:
- current and quick ratios shows assets covered by liabilities in percentage values. Desired value should be more than 100%;
- working capital (current assets less current liabilities),shows whether company have enough funds to cover debt;
- receivables and inventory turnovers, defined as each annual amount divided by average amount.
2) Statement of Profit, Loss and Other Comprehensive Income:
- revenue, cost of goods sold, net income, shown directly in a form;
- earnings per share, that directly influences stock’s value, as it is higher, as cost is higher;
- EBITDA, shows net income before deduction of amortization for intangible assets, depreciation for tangible ones, tax, interest;
3) Cash flow statements:
Operating, financial, investment activities results shown as different types of cash flow should be considered.
4) Equity statements:
That shows dynamics in size of capital.
5) Disclosures. Any values provided without appropriate comparison don’t make sense, because don’t give information on financial growth/stagnation/decrease in company’s indicators. Disclosures show important events, changes in structure and respective comparison between planned and actual results and between prior year and current year results.
Understanding and decision making
Correct interpretation of data obtained is a key to increase precision level of certain predictions. Positive difference between actual and planned results (shown on a monthly, quarterly, annual basis) will cause increase Company’s assets vale and respective cost of its shares increase and vice versa.
Use of earning calendar offered by IQ Option in a section Market Analysis will keep user tracking about dynamics in developing and productivity public of listed companies. Such changes give opportunities to predict declines or increases in price per share and take respective buy or sell decisions.