Research a company that went public through an IPO in the last five years. Did going public benefit the company? What were the benefits?

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In order to determine whether going public via an IPO in the last five years benefited a company, it will be necessary to review the company’s public filings and disclosures over the past five years. IPO stands for initial public offering and fully reporting public companies generally are required to file quarterly and annual financial statements so that investors (shareholders or bondholders) can monitor the company’s financial health.

The first thing to research is whether or not the company was able to put the capital that it raised through its IPO to good use. What did it cite as the use of capital in its IPO? Generally, companies will disclose how they expect to spend the money that they obtain from selling their shares to the public. Did they earmark the funds for a capital project, such as constructing a new manufacturing plant? Did they say they would use the money to introduce a new product? If so, the financial statements will be able to provide some insight into the health of the plant or product.

To determine what the benefits of the IPO were, check the revenue trends over the five years. Has revenue increased? If so, was the increase a direct result of the money that the company raised in its IPO? If revenue trends are positive, how much of the revenue is the company able to convert into profits? Is it more or less profitable than it was prior to its IPO? You can see this in the company's gross, operating and net margins. These are important metrics to use to monitor the company’s progress since its IPO.

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