To grow the business a company has to invest in assets. This investment could be an expansion of its manufacturing facilities, buying of more raw material, new machinery, acquiring any other company, etc. For this investment every company needs funds. These funds can come from company’s existing business operation. If the company can finance its entire investment for future growth by the cash flow from its operations, then it is an excellent thing. But very companies have sufficient amount of free cash flow to fuel its investments for future growth. [Read more…]
Valuation is generally the toughest part of fundamental analysis. There are so many methods to value a stock to know whether the stock is currently overpriced , fairly priced or cheaply priced. Here I am showing a very simple valuation method which requires very less calculation. [Read more…]
Accounting is a very important section for investors. New investors usually finds it difficult to analyze the financial statements. While making any investment decision investors have to first analyze the financial statements like income statement, Balance sheet, Cash flow statement etc after this analysis is doneanother important thing that investors have to do is valuation. Beginners who are from a different background finds these things difficult to understand, but believe me it’s not difficult. You can learn it yourself by reading these books.
The word Moat was introduced to the investing world by Warren Buffett. Moat refers to the competitive advantage which one company enjoys over other companies in the same industry. The wider the moat, greater and more sustainable is a competitive advantage. [Read more…]
Choosing stocks for investment is not an easy task. You have to read years of annual reports, study the industry in which the company is operating and then we need to do the valuation. It requires a lot of study and research. Things can be made easy by filtering the stocks on certain parameters suggested by some great investors. One such stock filtration formula is the magic formula. [Read more…]
When some company acquires another company we generally feel that it creates value for shareholders, but this doesn’t happens always. [Read more…]
Do you remember how sky rocketing onion prices becomes the buzzing news in the media. Prices going up is the news going down is not the news. As media focuses on negative things more. [Read more…]
NPA is crucial for banks. NPAs are not just non-performing assets they are beyond that as it impacts the future prospects of banks. [Read more…]