There are a lot of steps to figure out what a company is worth. But before we do that, it's important to understand how a business makes money. Does it do this by selling products to people? letting other companies use its technology by licencing it? or taking things from the ground that are natural.
Reading the company's annual report is the smart way to do it. What is a report on a year? Public companies publish an annual report every year to tell investors more about what the company does. Investors can get a quick look at the company's business, its financial health, and how it runs its business by reading the annual report.
CNET Networks Inc. is an example. The company's trading symbol on the NASDAQ market is "CNET." What does CNET do? I know cnet.com is owned by CNET. But did you know that it also owns download.com, MP3.com, ZDnet.com, and News.com? What tells me that? Yep, you guess it. All of that is in CNET's Annual Report.
From CNET's annual report, we can do some digging to find out how much traffic the site gets. As of August 27, 2005, these CNET sites get 3 percent of all traffic on the internet. Pretty amazing when you think that 23 percent of all internet traffic goes through Google. On April 2005, Google had 78.6 million unique visitors. By comparing this metric, we might be able to get an idea of how much money CNET could make in August. I won't talk about that, but it shows how helpful it is to read CNET's annual report. When you want to invest in a company, the first thing you should do is read its annual report.
Where can we find the annual report? This comes from a number of places. The first is the website of the company itself. You want to learn more about CNET Networks, right? You can get the annual report by going to http://www.cnet.com and clicking on "shareholder relations." You can then download the annual report after a few clicks.
Or, you can go to some websites that list the full annual reports of many different companies in alphabetical order. One of them is our site. Even though it's convenient to have hundreds of annual reports all in one place, it's not as detailed as what the company's website says.
