Many people think that you can earn profits in the stock market only when the prices are rising. But what if I tell you that you can earn profits even when the market is falling? In the normal course of trading, a trader will buy the stocks first and sell […]
What is Blockchain? How Does it Work? – Explained!
You might have heard about blockchain if you are following cryptocurrencies. A big misconception going about bitcoins and blockchains is that they are the same. This is false. Blockchain is a technology that supports bitcoin. But blockchain’s use is not restricted to bitcoin or cryptocurrencies. It is a revolutionary technology […]
Debt to Equity Ratio – Meaning, Formula & How to Use Debt to Equity Ratio to Analyse Stocks
Debt to Equity ratio (DE) is a popular leverage ratio. It is used by both investors and creditors to determine the financial strength of a company. A company raises capital in two ways – Debt Financing Equity Financing Debt financing is taking loan from a creditor in exchange for fixed […]
What is PE Ratio? Meaning, Formula, Types & NIFTY PE Analysis
Price to Earnings ratio or simply PE ratio is one of the most popular financial ratios used by investors to determine a stock’s fair value. This is done by comparing a stock’s market price to its earnings. When you buy a stock, you earn the right to a company’s future […]
Understanding Credit Ratings and the Agencies
Credit Ratings play an important role in deciding whether you must invest in a company. A good credit rating suggests that the company is financially strong and stable. While a poor credit rating means that the company is not financially strong and thus can be a risky investment. So, how […]
How to Read a Cash Flow Statement of a Company
People often believe that a cash flow statement shows a company’s profitability. But that’s not the case…they are two different things. A cash flow statement lists only the cash inflows and outflows. It helps us understand where the cash is coming in and where the company is spending it. While […]
Value Mutual Funds – Meaning & Performance Analysis
In 2008, the world was facing a financial crisis. Lehman Brothers declared bankruptcy and modern ‘great depression’ began. Millions lost their jobs and stock markets fell worldwide. The Dow Jones Industrial Average (DJIA) fell 53% from its peak in October 2007. The BSE Sensex fell 60% to 8,535 levels from […]
Basics of Fundamental Analysis – 3 Pillars of Fundamental Analysis
‘Only buy something that you’d be perfectly happy to hold if the markets shut down for 10 years’. This quote by Warren Buffett perfectly captures the spirit of fundamental analysis. Great investors like Warren Buffett, Benjamin Graham and Peter Lynch have built fortunes using fundamental analysis. But exactly, ‘What is […]
What are Liquidity Ratios? – Current Ratio, Meaning, Formula and Implications
Do you remember this scene from the movie Phir Hera Pheri? Akshay Kumar’s character roams around the city with a 1,000 rupee note. Everyone around him thinks he is rich. However, he cannot even buy a bus ticket! His Rs 1,000 looks good only on paper. In reality, he has […]
How to Read an Income Statement of a Company
Would you invest in a company just because they are making profits? Does making profit guarantee that the company is good for investment? A balance sheet helps us understand how much debt a company holds. Whereas an Income Statement shows us how much profit it generates to become debt-free. For […]