When trading or investing in stocks, understanding a company's financial health is crucial for making informed decisions. Key financial metrics, such as earnings and the price-to-earnings (P/E) ratio, provide valuable insights into a company’s profitability, valuation, and future potential. Traders use these metrics to assess whether a stock is undervalued or overvalued and to identify potential investment opportunities.
1. Earnings
Earnings refer to a company's profits after all expenses have been deducted from its revenues. They are typically reported on a quarterly and annual basis. Earnings are one of the most important indicators of a co...