Share buybacks have emerged as a powerful tool for Indian companies to optimize their balance sheet and improve shareholder value. In this article, we explore the ins and outs of share buybacks and their impact on the financial health of Indian companies. Read the latest story of shares buyback by Tanla Platforms. Investors can potentially…
The EV/EBITDA ratio is a financial metric that is commonly used to judge the valuation of a company. It is often used as an alternative to the (P/E) ratio. The EV/EBITDA ratio is considered to be a more comprehensive valuation metric. In this article, we’ll learn more about this ratio. EV/EBITDA Calculator Use this calculator…
Shares issued at a premium are a common practice among companies. It is especially true during times of growth or expansion. But what does it mean, and why do companies do it? In the article, we will explore the concept of shares issued at a premium and the reasons behind it. We’ll also see the…
The objective of this article is to emphasize the need for maintaining basic liquidity and solvency levels for a financially healthy company. We’ll learn about liquidy vs solvency from the eyes of a stock investor. We’ll look at the concept and financial metrics that will help to quantify and comprehend a company’s liquidity and solvency…
The purpose of this article is to share my point of view on the concept of shareholder value. The piece is written from the perspective of an investor. For an investor, a company that is managed with the goal of enhancing the shareholder’s value is a good company. But it is also necessary to check…
Buying stocks of a company makes one a proportional owner of it. Suppose there is a company whose shares you own. This company made about Rs.2,140 crore net profit in a financial year (FY). Let’s assume that this profit was also collected as cash in the same FY. If you are a majority shareholder of…
Warren Buffett is an investor that we can emulate. Warren Buffett’s letter to shareholders provides valuable insights and understandngs. These letters are full of hints about the investment philosophy practiced by him. The letter becomes even more endearing because every year, since year 1977, Buffett’s letter accompany’s the Berkshire Hathaway’s annual report. For sure, we…
The Altman Z-Score model assesses bankruptcy risk through five weighted financial ratios from balance sheets and profit statements. A score above 3.0 signals a financially stable company, safe for investment. Scores between 1.88 and 3.0 are borderline and worth avoiding, while below 1.88 predicts potential bankruptcy within two years.
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 companies carry debt on their balance sheet. For example, here is data for companies in the BSE-500 index. Out of all stocks in this index, only 19% are debt-free. About…
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 Worth – NW) of a company. ROE is the measure of the company’s efficiency that highlights how well the company is using shareholder capital to yield net profits. A list…
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 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.
