Advantages & Disadvantages of Debt for Companies
Why do the big companies have debt? Are there disadvantages to being a debt-free company? Debt is Good or Bad for Companies? We often see
Shareholder Equity – Meaning, Basics, Examples, & Interpretation
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,
Return on Equity (ROE) – Understanding & Interpretation of The Ratio
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
Relative Price Valuation – A Method To Compare Stocks & Judge Its Value
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…
Power of Compounding: How Does it Multiply Our Investments Over Time?
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.
Net Present Value Calculation: Estimating Intrinsic Value [All Steps]
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.
Price To Earnings Ratio [P/E] – Basics, Formula, Calculation, & Interpretation
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.
Debt To Equity Ratio – Basics, Formula, Calculations, and Interpretation
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.
How To Shortlist Stocks for Investment – 12 Parameters [Screener]
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.