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Showing posts from June, 2021

27-6-2021 Vocabulary

1)  innocuous -  Not harmful or offensive, harmless, insipid People say seemingly innocuous comments all the time that inadvertently hurts the morale of everyone  around them. 2) Jeopardize - To risk, threaten, endanger You work so hard at your job. So, do you really want to jeopardize all that by saying something dumb. 3) Veritable - Used for emphasis, to prove that a thing/place is not unreal, used to stress on the genuiness Costa Rica (works on 100% renewable energy) is a veritable paradise. 4) Prescience - Foresight, knowing something in advance, visionary, prophetic, predictive The prescience of a skilled business man. A prescient warning. 5) Cartelization - Formal aggregation between group of companies to regulate supply or manipulate prices. Manu Manek formed the bear cartel (a group of people that manipulate the stock market to earn profits are referred to as a cartel) in which the 3R's (Rakesh Jhunjhunwala, Radhakishan Damani, and Raju Chartist) were his famous a...

Financial Ratios to analyze for a stock

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  Profitability Ratio: Shows whether the stock can give profit in the future. Return on equity = Net profit / shareholder equity Net profit we can get in the P/L statement & the latter one from balance sheet. High ROE = Business constantly generating good profits and giving back to investors It depends on Sector,  always check the average for the particular sector. Ex: Infra stocks have lots of debt so ROE can be inflated, the Manufacturing companies might have low EPS compare to an IT stock. Manufacturing giants reinvest the profit, build a new plant and those new plants take few years to generate profits. Whereas, IT stocks pay out hefty dividends so have high EPS. Net Profit Margin This is percentage of profit of a company produced from its total revenue. Net profit after tax / total revenue Ex: 100 is total revenue and after tax the profit is 10Rs. Which means the profit margin is 10%. For every 100 revenue, profit is 10 rs. Search for stocks with increasing net p...