How to do research on a company?

How do i research a company for stock trading purposes?

• i have been trading for a while now.. i do okay.. i want to start trading like the pros and all the pros say to research before you buy. i want to know exactly what to research, i keep getting general answers but now i want in full detail as in research x and why? and then after that you should look at this and that.. and so on.. i want to delve into this company (any) so deep i basically have its dna all over me. so please if anyone has any answers, guidelines, bullet points and explanations it would be much appreciated.

• Answer:

  Sorry I'm not much help with the specifics but I can tell you what I know so far (i'm kind of in the same boat as you). A real big thing is to look at their ratios first, things like the P/E ratios to determine how the market feels about them. For example, a high P/E (price/earning ratio) means that the market things the company can do really good, however if something goes wrong, the stock will most likely tank. On the otherhand, a low P/E means people don't expect much out of it but if something goes wrong, there's less volatility. I also hear you should look at their financial documents such as their balance sheets and cash flows. You want to know what kind of assets and liabilities (loans) the companies have and the balance between the two. Obvious, too much liability is bad but at the same time it's needed to help advance the company. At the same time, you need to know where their money is going. If a company keeps pumping all of its money in one place when it should be developing somewhere else or if it just has bad money management in general, that's a bad sign for the company. A key that I've been hearing is that you also want to take some time and feel out the management and leadership of the company. Some times (supposedly) you can get a real idea of where the company is going based on the drive and determination (or lack there of) of its executive leadership. Some things you might have to pay for, others are available free on the company's websites. You basically want to look at all of their financials, past, present, and future and see what kind of developments and advancements the companies are working on and whether: 1) they'll work and 2) whether they'll pay off and be worth the company's investments or not. But once again, that's all I've picked up so far basically off the top of my head. Sorry I couldn't be more specific help but good luck to you.