Stock market - All you need to know as investor
PE ratio: - Price to Earnings' ratio, which indicates for every rupee of earnings how much an investor is willing to pay for a share.
A general rule of thumb is that shares trading at a LOW P/E are undervalued (it depends on other factors too). But there are many stocks which are over valued but has shown greater level of performance.
Return on Assets (ROA): - Return on Assets measures how effectively a company can earn a return on its investment in assets. In other words, ROA shows how efficiently a company can convert the money used to purchase assets into net income or profits.
Current ratio: - The current ratio measures a company's ability to pay its short-term liabilities with its short-term assets. A higher current ratio is desirable so that the company could be stable to unexpected bumps in business and economy.
Return on equity: - ROE measures the ability of a firm to generate profits from its shareholders investments in the company. In other words, the return on equity ratio shows how much profit each rupee of common stockholders’ equity generates. Higher is recommended.
Debt to equity ratio: - It is a good metric to check out the capital structure along with its performance. Less than 1 or less than 0.5 means that the company has low proportion of debt in its capital.
Inventory turnover ratio: - Inventory Turnover ratio is an activity ratio and is a tool to evaluate the liquidity of a company's inventory. It measures how many times a company has sold and replaced its inventory during a certain period of time.
Sales growth: - growth of 37.36 % which is fair and above 50 % is best in relation to its growth and performance.
Operating Margin: - This will tell you about the operational efficiency of the company.
Dividend Yield: - It tells us how much dividend we will receive in relation to the price of the stock.
Promoter pledging - This should be 0. This means A promoter shareholding in a company is used as collateral to avail a loan. While pledging shares, promoters retain their ownership.
Some other key points to search -
Always check whether any of board members or CEO or MD has got into misconduct .
In order to do this ,simple way is to search on google with each of names of board member or CEO or MD name of company ,search of as much as history you can .there should not any negative news of company.
Also always check company annual presentation ,what are future plans about product and expansion of there company .
A general rule of thumb is that shares trading at a LOW P/E are undervalued (it depends on other factors too). But there are many stocks which are over valued but has shown greater level of performance.
Return on Assets (ROA): - Return on Assets measures how effectively a company can earn a return on its investment in assets. In other words, ROA shows how efficiently a company can convert the money used to purchase assets into net income or profits.
Current ratio: - The current ratio measures a company's ability to pay its short-term liabilities with its short-term assets. A higher current ratio is desirable so that the company could be stable to unexpected bumps in business and economy.
Return on equity: - ROE measures the ability of a firm to generate profits from its shareholders investments in the company. In other words, the return on equity ratio shows how much profit each rupee of common stockholders’ equity generates. Higher is recommended.
Debt to equity ratio: - It is a good metric to check out the capital structure along with its performance. Less than 1 or less than 0.5 means that the company has low proportion of debt in its capital.
Inventory turnover ratio: - Inventory Turnover ratio is an activity ratio and is a tool to evaluate the liquidity of a company's inventory. It measures how many times a company has sold and replaced its inventory during a certain period of time.
Sales growth: - growth of 37.36 % which is fair and above 50 % is best in relation to its growth and performance.
Operating Margin: - This will tell you about the operational efficiency of the company.
Dividend Yield: - It tells us how much dividend we will receive in relation to the price of the stock.
Promoter pledging - This should be 0. This means A promoter shareholding in a company is used as collateral to avail a loan. While pledging shares, promoters retain their ownership.
Some other key points to search -
Always check whether any of board members or CEO or MD has got into misconduct .
In order to do this ,simple way is to search on google with each of names of board member or CEO or MD name of company ,search of as much as history you can .there should not any negative news of company.
Also always check company annual presentation ,what are future plans about product and expansion of there company .
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