What Do These Numbers Mean? Understanding Square’s Financials
For those unfamiliar with the world of business and finance, the numbers associated with a company’s financial performance might be intimidating. Let’s break down the numbers associated with Square Inc. to make them easier to understand.
Square Inc., a payments processing platform, recently announced their 4th quarter earnings for 2020. They reported total net revenue of $3.84 billion which was an increase of $4.39 billion from 2019. Within that figure, they reported net income of $1.81 billion – an increase from 2019’s net income of $1.62 billion.
The first number that was reported, total net revenue, is the amount of money that a company earns through its operations and activities before expenses are paid out (such as taxes and other costs). This number is also referred to as “the top line” because it appears at the top of a company’s financial statement (often abbreviated as P&L). The second number reported is Net Income which is the amount of money left after all expenses have been paid out; this figure is also referred to as “the bottom line” because it appears at the bottom of a company’s financial statement (P&L).
In addition to these two figures, companies often report YoY or Year-over-Year changes in their performance which compares the current year’s performance against last year’s performance for comparison purposes. For Square Inc., their total net revenue increased by $4.39 billion YoY while their Net Income increased by $1.81 billion YoY – indicating significant growth within both categories compared to 2019’s performance figures.
Conclusion:
Releasing financial statements can be daunting if you don’t know what they mean or how they relate to one another – but understanding how to read them can provide valuable insights into a company’s overall performance and help investors make decisions about which companies they should invest in or support financially. In the case of Square Inc., their latest financial reports show substantial growth in both Total Net Revenue and Net Income when compared to 2019’s figures – promising news for potential investors! With some basic knowledge about what each figure means, anyone can gain insight into a company’s overall financial health without being overwhelmed by its complexity – enabling informed decisions about where we choose our investments! With some basic knowledge about what each figure means, anyone can gain insight into a company’s overall financial health without being overwhelmed by its complexity – enabling informed decisions about where we choose our investments!
