A more common term for shareholder equity is Net Worth. It is visible on the company’s Balance Sheet. This number highlights an approximate liquidation value,
What is Return on Equity (ROE)? It is a financial ratio that is calculated by dividing net profit (PAT) by the total shareholder’s funds (Net
Performing stocks analysis by comparison method is relative valuation. We can compare a company’s valuation multiples with its industry average or with its peers. This valuation approach is easy but there are limitations…
The power of compounding is as synonymous with human life as are the three laws of motion. The best part is, its effectiveness can be explained using mathematics. It is a theory which is a “must-follow” for everyone.
The mathematics side of Net Present Value estimation is complicated. Hence, we’ve implemented the whole algorithm in our stock screener. Nevertheless, this article explains my NPV algorithm in full detail.
P/E ratio in its basic form (trailing P/E) may not be as useful. But there can be multiple derivaties of it. P/E ratio seen through the lens of ‘earning yield’ or ‘PEG ratio’ gives good insights into price valuation. I personally love valuing high P/E stocks using the ‘forward P/E’ method.
The debt-Equity ratio (DE) is easy to calculate. But its interpretation is not as straightforward as we think. We generally assume that a DE ratio of 2 is acceptable. But for analysts, this number is too high. Let’s look at the DE ratio from an analyst’s perspective.
If a layman would like to shortlist few stocks, what parameters must be considered? In this article I’ve explained how a 12-Parameter stock screener will help in the screening process.