Tuesday 2 February 2021
Here are 3 key concepts, 2 key resources, and 1 key action, to help you understand reporting season, and get you started investing.
- What is reporting season?
The period of time when public companies release their business results to the market a.k.a they’re letting you (the part-owner) know how they are performing.
In Australia, companies report in February and August. In the United States, it happens in January, April, July and October. - Does it matter?
Yes! You want to know how your company is performing. Are they making more money each year? Are they making profits? Do they have a strategy to beat the competition?
Reporting season is your opportunity to hear directly from the companies. - What does it mean for me?
If you’re just cruising, and passively putting money into a portfolio of ETFs, it doesn’t mean a lot.
If you’re investing in individual companies, it can mean a lot. If your company is reporting that it’s losing money, or losing market share, or perhaps it’s lost a major contract with a supplier, then it gives you a chance to reconsider your investment.
Similarly, if a company keeps reporting great profits and customer growth, year after year, then perhaps you should take notice – it could be a buying opportunity.
- Find out when your companies are reporting using this reporting season calendar (Australia 2021)
- Understand the difference between revenue and profit. These are two metrics most commonly reported by companies.
Keep an eye on your companies ‘investor’ section on their website. This is where they will release their results – and you want to hear it from them, not the market commentators! Here is an example on the Commonwealth Bank website.
Head to the Get Started Investing page to listen to the episode with more information on reporting season.