Monday, July 21, 2014

Top 6 Ratios for analyzing a stock.

          
   


-----------------------------------------------------------------


Series:  Ratio Analysis  (1  post )

-----------------------------------------------------------------

1 Liquidity Measurement Ratios.    
Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is
done by comparing a company's most liquid assets (or, those that can be easily converted to cash), its short-term liabilities.

2 Profitability Indicator Ratios
Profitability Indicator Ratios,  give users a good understanding of how well the company utilized its resources in generating profit and shareholder value.

3 Debt Ratios.   
Debt Ratios ratios give users a general idea of the company's overall debt load as well as its mix of equity and debt. Debt ratios can be used to determine the overall level of financial risk a company and its shareholders face. In general, the greater the amount of debt held by a company the greater the financial risk of bankruptcy. 
    
4 Operating Performance Ratios
Operating Performance Ratios  is a rough measure of the productivity of a company's fixed assets (property, plant and equipment or PP&E) with respect to generating sales. For most companies, their investment in fixed assets represents the single largest component of their total assets. This annual turnover ratio is designed to reflect acompany's efficiency in managing these significant assets. Simply put, thehigher the yearly turnover rate, the better.

5 Cash Flow Indicator Ratios
The ratios in this section use cash flow compared to other company metrics to determine how much cash they are generating from their sales, the amount of cash they are generating free and clear, and the amount of cash they have to cover obligations.

6 Investment Valuation Ratios
Investment Valuation Ratios  compares a stock's per-share price (market value) to its book value (shareholders' equity). The price-to-book value ratio, expressed as a multiple (i.e. how many times a company's stock is trading per share compared to the company's book value per share), is an indication of how much shareholders are paying for the net assets of a company.


Next Post on Beginning Investing: Liquidity Measurement Ratios.(Current Ratio)    


       Related Articles
       

Share |

8 comments:

  1. Index heavyweight Reliance Industries Limited went down in volatile trade. Sesa Sterlite Inds. too shed some points on profit booking after recent rally. However, Capital goods stocks did well amidst renewed buying. If capital goods industry of any country does good then it signals that the economy and especially infrastructure is doing good.
    MCX Tips

    ReplyDelete
  2. Majority of Rs 83,662cr raised will go to poor states. Orissa is expected to get Rs
    607cr, Madhya Pradesh will get Rs 39,900cr, Maharashtra will get Rs 18,900cr. stocks to buy today

    ReplyDelete
  3. When I read an article that makes this subject so interesting I have to say something. Your insightful points and interesting material has given me reason to ponder these things.I am highly impressed with this information.

    ReplyDelete
  4. Interesting post, related to different ratios for analyzing the stock which serves as a tool for traders.

    ReplyDelete
  5. Very relevant information has been posted that going to be be very helpful in trading. Epic Research do research in deep to generate the most accurate trading tips.

    ReplyDelete
  6. We are really grateful for your blog post. You will find a lot of approaches after visiting your post.

    Great work.

    Such a very useful article. Very interesting to read this article.I would like to thank you for the

    efforts you had made for writing this awesome article.
    Sign in to Gmail to access to all Gooogle services. Log in to your account or sign up to create a new

    account
    gmail sign in

    gmail log in

    what's gmail?

    slitherio

    Tank trouble

    happy wheels

    Strike Force Heroes

    In this game, you start at the cavern men's age, then evolve! There is a total of 5 ages, each with its

    units and turrets. Take control of 16 different units and 15 different turrets to defend your base and

    destroy your enemy.
    age of war

    We are really grateful for your blog post. You will find a lot of approaches after visiting your post.

    Great work.
    happy wheels

    strike force heroes

    earn to die

    Fireboy and Watergirl arrived again to the temple in the forest. 2 players together can help them to find

    their way out.
    fire boy and water girl

    ReplyDelete
  7. Welcomes to google terminal from Austin Texas! google snake
    Amazing insight you have on this, Happy wheels it's nice to find a website that details so much information about different artists... Age of war 2 This article always blew me... Earn to die For how many times I have read this.
    slither io Hi! I’ve been reading your blog for a while slitherio it's nice to find a website that details so much big farm

    ReplyDelete
  8. Hey I am really impressed to know these essential ratios for analysing the stock. Keep up the good work. Even I want to have a good investment portfolio and all such details are highly valuable for me. Even I would prefer options that have good Profitability Indicator Ratios. Looking for some details about MFs, what is equity and forex. Can you help regarding it?

    ReplyDelete