Stock research guides · Guide 2 of 10
How to research a company before you look at its ratios
Using Microsoft as the example: choose the right security, understand how the business makes money, and read profiles and news with their dates in mind.
Key takeaways
- A ticker can match several instruments: confirm the exchange, currency and instrument type first.
- Check whether a price is live, delayed or end-of-day before interpreting it.
- Understand the business segments before deciding which comparisons and ratios make sense.
- Company profiles and headlines are dated snapshots: read the source, not just the headline.
A chart or a ratio is only as meaningful as your grasp of what it describes: which security, in which currency, as of when, and for what kind of business. This guide works through those checks with Microsoft as the example, from confirming the listing to weighing profiles and headlines by their dates.
Choose the right instrument, not just the ticker
A ticker identifies a security, but the same letters can lead to several products. A search for MSFT can return Microsoft's common stock on Nasdaq alongside currency-hedged Canadian depositary receipts, leveraged products and tokens: different instruments with different risks.
| Instrument | What it represents | What to check |
|---|---|---|
| Common stock | Ownership of the company | Exchange and currency |
| Depositary receipt | Shares held by a bank | Shares per receipt, currency hedge |
| Leveraged product | A multiple of daily moves | Daily reset and costs |
| Token | Exposure to the share price | Issuer and holder rights |
A depositary receipt lets shares trade on another exchange and in another currency; one receipt may stand for a fraction of a share or several, and a currency-hedged receipt's return can differ from the share's. A token is issued by a third party and may lack the voting rights, dividends or legal protections of the share.
A leveraged product aims to deliver a multiple, such as twice, of a share's daily move. Because it resets daily, longer-term results can differ sharply from that multiple, and leverage magnifies losses as much as gains, since prices can fall as well as rise.
Return over two days = (1 + day 1 return) × (1 + day 2 return) − 1Take a hypothetical share that rises 10% one day and falls 10% the next: it ends 1% lower (1.10 × 0.90 = 0.99). A product that doubles each daily move rises 20% then falls 20%, ending 4% lower (1.20 × 0.80 = 0.96), not 2%.
Reported financials describe the company, so a ratio built from a receipt's price without adjusting for how many shares it represents and for currency would be wrong.
Check the currency and timing of a price
A price means little until you know its currency and timestamp. Microsoft's common stock on Nasdaq is priced in US dollars, a receipt elsewhere trades in local currency, and some companies report results in a different currency from their shares.
Return in your currency = (1 + share's return) × (1 + currency's change against yours) − 1Take a hypothetical share that gains 10% in US dollars in a year when the dollar falls 5% against the pound: in pounds, the gain is about 4.5% (1.10 × 0.95 = 1.045), not 10%.
Timing matters as much. A price can be live, delayed, a one-off snapshot, or end-of-day: the close of the latest completed session. An end-of-day price is not a quote you could trade at now; the next trade can happen at a different price, especially after news outside market hours.
On a chart, the time window and the length of each bar raise the same question, and how to read a stock chart explains both.
Understand the business before its ratios
A company's business description and reported segments show what its numbers are made of. Segments are the parts of a business that management runs and reports separately, and accounting standards require listed companies to disclose them.
In the company profile shown on dotQuant in September 2026, Microsoft's business was described in three reported segments:
- Productivity and Business Processes, including Microsoft 365, LinkedIn and Dynamics.
- Intelligent Cloud, including Azure, GitHub and AI offerings.
- More Personal Computing, including Windows, Xbox and search.
The mix is the point. Subscription software, a cloud platform built on data centres, and products tied to PCs, gaming and advertising grow at different speeds, need different investment and carry different risks, so no single familiar product explains the whole company.
Segment share of revenue = segment revenue ÷ total revenue × 100Take a hypothetical company with revenue of 100 billion: 45 billion from software, 35 billion from cloud services and 20 billion from devices and advertising. A 10% fall in devices and advertising cuts total revenue by 2%; the same fall in software cuts it by 4.5%.
Segments also decide which comparisons are fair, and consumer and business segments can respond differently to the economic backdrop. They are redrawn from time to time, so check the latest annual report before comparing years, then turn to margins and valuation ratios.
Know the fiscal calendar
A fiscal (or financial) year is the twelve-month period a company uses for its accounts, and it need not match the calendar year. In the company profile shown on dotQuant in September 2026, Microsoft's fiscal year ends in June.
Take two hypothetical companies that each call their latest year fiscal 2026, one ending in December 2026 and the other in June 2026. Their years overlap by only six months, so a slowdown in the second half of 2026 would appear in only one set of results.
Quarters need the same care: compare a quarter with the same quarter a year earlier, because many businesses are seasonal.
Read the company profile as a dated snapshot
A company profile gathers facts such as the listing exchange, initial public offering (IPO) date, fiscal year-end, leadership and headcount. These are observations from a point in time, not live measurements, and they age at different speeds.
In the company profile shown on dotQuant in September 2026, Microsoft was listed on Nasdaq, with an IPO on 13 March 1986, Satya Nadella as chief executive and Amy Hood as chief financial officer.
| Profile field | How often it changes | Where to confirm |
|---|---|---|
| IPO date | Never | Investor relations |
| Listing exchange | Rarely | Investor relations |
| Fiscal year-end | Rarely | Annual report |
| Leadership | From time to time | Filings, press releases |
| Employee count | Usually yearly | Annual report |
Headcount is a typical dated field, usually reported as of a fixed date such as the fiscal year-end. Take a hypothetical profile listing 10,000 employees from the last annual report: if 1,000 jobs have been cut since, it overstates today's workforce by 1,000.
Weigh news by publisher, date and source
A headline is a compressed version of events. Before accepting what it implies for a company's earnings or risks, check four things:
- Publisher: is it original reporting, commentary, a republished press release or an aggregator?
- Timing: when was it published, and when did the underlying event happen?
- Topic: two headlines about one company can concern unrelated issues, such as a product security feature and a public-sector contract.
- Primary source: what did the company or its regulator actually publish?
For a US company such as Microsoft, the primary sources are its SEC EDGAR filings (the annual 10-K, quarterly 10-Q and 8-K reports on significant events) and Microsoft Investor Relations.
Several outlets often repeat one underlying story, so count events rather than headlines. Take a hypothetical morning with eight headlines about a company: if six rewrite the same results announcement, there are three stories, not eight. Recency alone does not establish relevance or reliability.
Fresh headlines also do not mean the AI analysts have re-run their review. Each evaluation carries its own date, and news published after it cannot have been taken into account.
Putting it into practice on dotQuant
Without an account you can search any symbol, open its page and see its charts, news, the Key Metrics panel and the AI analysts' reviews. Search can return several instruments for one ticker, from other exchanges, depositary receipts or leveraged products, each showing its exchange, country and instrument type.
Without an account, prices are end-of-day, topped up shortly after each exchange's close, and a "PREV" chip marks data that still shows the previous session (see market data). Live intraday prices need an account, the dotQuant desktop app and your own Interactive Brokers market-data subscriptions; the 1D chart then shows today's 1-minute bars from those subscriptions, marked "LIVE · IBKR", "DELAYED · IBKR" or "SNAPSHOT · IBKR".
News on a symbol page shows the symbol, publication time, publisher and headline; compare those times with the evaluation date and time in the "Fundamentals Matrix" panel. The six AI analysts are AI-generated research perspectives, each with a fixed investing style: they are not human analysts, their confidence is not a probability of profit, and their "BULLISH", "NEUTRAL" or "BEARISH" labels are not recommendations (see the AI analysts).
Key Metrics figures are "as of" the report date, and the rows that carry a "Y/Y change" compare with the prior fiscal year. A guest watchlist lives in that browser only, and signing up is needed for it to persist; buying and selling needs an account and a connected broker.
Common questions
Why don't all companies end their financial year in December?
A company can choose its year-end, and some pick one that suits their business cycle; retailers, for example, often close their year after the busy holiday season. For research, what matters is knowing the year-end and comparing matching periods.
Where can I find a company's official filings?
Companies that file with the US Securities and Exchange Commission have their annual, quarterly and current reports on EDGAR. Most listed companies also publish results and annual reports on an investor relations website, and elsewhere the local exchange or regulator plays a similar role.
Further reading
- Market context: how unemployment and interest rates frame stock research: the economic backdrop first.
- Stock valuation ratios explained: what to measure next.
- How to read a stock chart: windows, bar intervals and their limits.
- SEC EDGAR full-text search: company filings, including 10-K, 10-Q and 8-K reports.
- SEC, How to Read a 10-K: a tour of the annual report (PDF).
- Microsoft Investor Relations: the company's own results and reports.