Posts Tagged: financial

Stock Market

Master Class 12: Understanding Quick Ratio & Interest Coverage Ratio

Identification of companies with good investment opportunities is something that every investor should know how to do. Similarly, it is equally important to identify companies that do not have good stocks, companies that might be on the verge of bankruptcy, or companies that are unable to bear their own financial burden. The stocks of such companies are doomed to fail, and thus, investment here can prove to be a very bad decision and can lead to the loss of the investor's valuable money.

Stock Market

Master Class 11: Price to Growth (PEG) Ratio

One of the most important steps in evaluating a company's financial health and position is its valuation. Basically, the valuation of anything is an estimation of its worth.

Stock Market

Master Class 10: Return on Capital Employed and Return on Equity - ROCE Vs ROE

Staring at the financial statement for hours will not help you pick the best stocks. In fact, it is like looking at a 1000 page literature book without making an attempt to understand it. You need to start reading it in both cases. Just like alphabets, ratios aid you in your process of understanding financial health, risk, growth, and various other important metrics pertaining to the company. So if you are keen on picking up the right stocks, then the usage of ratio analysis becomes pivotal.

Stock Market

Master Class 5: Asset Turnover, Cash Cycle Ratio and Share Split

Have you seen the applications of your peers? Sometimes the achievements, degrees, and skills exceed their age. We try and hone our skills in every way possible. Similarly, to add more feathers to your cap of stock market analysis techniques, let us take you through another two important ratios:

Stock Market

Master Class 4: Understanding Return on Equity and Net Profit Margin

Any experienced investor knows that no investment decision can be taken by considering just one or two financial figures. In most cases, the analysis of multiple figures is required to get a clear picture of a company's financial health and performance. The company's financial statements are made public so that any potential investor can make their own analysis based on their evaluation of the data. Hence, to get a full and thorough look at any company's performance and to make an investment decision, one must understand how to evaluate the various financial figures that a company displays.

Financial Ratios

What is Return on Capital Employed (ROCE)?

Companies ensure that they provide better returns to their investors with the addition of leverage in their total capital, and thus show higher profitability and returns. We also previously understood evaluating a company's profitability and rate of returns to its investors with the use of Return on Assets (ROA) and Return on Equity (ROE) ratios.

Brokerage Review

ICICI Securities Review

When you invest in the stock market, you expect good returns from it. Hence, It is crucial to deal with the right broker.

Financial Ratios

Understanding Financial and Operational Leverages

When a company wants to increase its investments in order to expand its asset base and generate returns towards risk capital, it sometimes borrows capital as a funding source. This is known as Leverage. Leverage is an investment strategy of using borrowed money, specifically from financial instruments or borrowed capital, to increase its potential rate of returns on equity. Leverage also refers to the amount a company borrows or the debt it uses to purchase or finance assets.

Financial Ratios

DuPont Analysis and its importance

The Return on Asset and Return on Equity are among the most important considerations investors take while making an investment decision. It gives an insight into how well a company uses its assets to generate revenue and determines the value it creates for its shareholders and investors.

Financial Ratios

Return on Equity: Definition, Formula, Calculation, Example and Importance

In the previous blogs, we understood the meaning and application of the accounting ratios of Return on Investments (ROI) and Return on Assets (RoA). While ROI gives an insight into overall profitability, ROA focuses on the returns generated through the efficient use of the assets a company possesses.

Financial Ratios

Importance of Return on Assets in Investment Decision

In the last blog, we understood the need to analyse how a company uses its investments and assets in order to generate profits and provide returns to its investors, through the calculation of Return on Investment. However, as mentioned earlier, ROI is a broader measure and focuses on the returns generated on different types of investments.

Financial Ratios

Analyzing Investment Decisions through Return on Investments

Before deciding to invest money in a company, a potential investor must analyze the company's ability to provide returns to its shareholders. Investors, business managers, and stock advisors analyze this ability by calculating various ratios and percentages based on the company's financial statements.

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Ratio Analysis: Guide to Efficiency Ratios Analysis

Stock investing involves a careful analysis of the companies and their financial data to arrive at their true worth. One can examine the company’s Quarterly and Annual accounts to determine how productively they are managing its assets and liabilities to maximize profits. However, this can be cumbersome and will not determine the efficiency levels of the business. An easier way to find out about a company's performance is to look at its financial ratios. Though this is not a foolproof method, it is a good way to run a fast check on a company's health. Read the guide on Ratio analysis

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ITC to acquire spice maker Sunrise Foods.

When we observe corporate stalwarts or ‘giants’, we see that they are never satisfied. They are always looking for more. If they have acquired a decent market share, they look for diversification of their offerings. If they have successfully diversified, they look for integrations (forward and backward). And, this keeps going on. The Fast Moving Consumer Goods (FMCG) industry is slightly more dynamic in this case. And hence, FMCG giants are always on the move.

Stock Market

How Important is ROE for Investors?

Forget head-and-shoulders, bear traps double bottoms, forget volume, and forget stochastics. When you’re looking at a company, the single-most-important number is return-on-equity. Return on Equity is how much profit a Company generates when compared to shareholder equity. What makes ROE so good as a tool to analyze a Company is because it doesn’t account for the price of the stock. It only measures the company’s performance, not the stock’s performance.

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How ROA and ROE help in analysing corporate health?

It’s a no brainer for an investor to look into the financial ratios before making investment decisions, as there are no single measures to tell the whole story, making informed investment decisions could be tricky and may rattle your grey cells.

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What is the importance of Interest Coverage Ratio?

"If there is one common theme to the vast range of the world’s financial crises, it is that excessive debt accumulation, whether by the government, banks, corporations, or consumers, often poses greater systemic risks than it seems during a boom." — Carmen Reinhart

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Why is Price to Earnings (P/E) Ratio important for Company Analysis?

For any investor, analyzing a company thoroughly is as important as knowing his risk appetite. Price to Earnings ratio of a stock forms an integral part of its valuation matrix and varies across sectors and companies.

Master Class 12: Understanding Quick Ratio & Interest Coverage Ratio

Master Class 11: Price to Growth (PEG) Ratio

Master Class 10: Return on Capital Employed and Return on Equity - ROCE Vs ROE

Master Class 5: Asset Turnover, Cash Cycle Ratio and Share Split

Master Class 4: Understanding Return on Equity and Net Profit Margin

What is Return on Capital Employed (ROCE)?

ICICI Securities Review

Understanding Financial and Operational Leverages

DuPont Analysis and its importance

Return on Equity: Definition, Formula, Calculation, Example and Importance

Importance of Return on Assets in Investment Decision

Analyzing Investment Decisions through Return on Investments

Ratio Analysis: Guide to Efficiency Ratios Analysis

ITC to acquire spice maker Sunrise Foods.

How Important is ROE for Investors?

How ROA and ROE help in analysing corporate health?

What is the importance of Interest Coverage Ratio?

Why is Price to Earnings (P/E) Ratio important for Company Analysis?

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