Ratios that matter in stocks

   1.  Current Ratio

 It gives an idea about company's financial health.

Current ratio <1 :

 Liabilities are more as compared to assets  and shows financial health of company is not good but we can't say it will necessarily go bankrupt.

But still, a current ratio below 1 is usually not a good sign.


Current ratio > 3 : 

High current ratio does not  guarantee company's good financials  

    2. Quick Ratio :
High quick ratio  indicates a company is better able to meet its current obligations by making use of liquid

    3. Beta 
          beta <1 implies stock is  less volatile than the market. 
          beta >1 implies stock  is more volatile than the market. 
         For example, if a stock's beta is 1.1, it is  10% more volatile than the market.

impetous ....stock buy:steps to follow

One needs to be patient while buying Stocks...

That said I tend be impetuous at times ....

To reach at a  conclusion is some what difficult owing to deluge of info available...
Nevertheless info can be sifted by embarking on steps......

Step 1: Industry :It may be chosen ,as a first step.Try to invest in industry which u understand ,
                               so that u may guess its growth opportunities.

Step 2: Company Stats:To see whether stock price is attractive w.r.t. earnings of the company check:

•       P/E ratio
•       P/B ratio
•        beta
• volume of shares
• investors
• owners    
• candle stick charts: It contains the  market's open, high, low and close of a specific day.

  Step 3:      Then comes  types of stocks : Caps  

                  'Cap' merely refers to the 'market capitalization' of the stock, which is the value of the 

                  stock that you get by multiplying the stock price by the company's outstanding number 

                   of  equity  shares.

                              Market Capitalization = Current Stock Price x Number of Shares outstanding

 Consider an example:
A company ABC has (1 Crore) 10,000,000 shares outstanding and its current share price is Rs 8. we can calculate that Company ABC's  market capitalization :  Rs 80 million
 or (10,000,000 shares x Rs 8 per share).


 

1. Large- Cap stock 

Market capitalization for large cap stocks range from Rs 200 billion to Rs 3,500 billion.

The  large and well-established companies   are generally considered as safe investments. Large companies such as Ashok Leyland, ACC Ltd  are termed  as large cap stocks. These companies have been around in the industry long enough and have firmly established themselves as leading players. Their stocks are publicly traded and have large market capitalization.

 Large-cap companies  tend to be less volatile than mid-cap and small-cap stocks and are hence offer less uncertainty.

 2. Mid-cap stock

Mid caps are typically defined as companies with market caps that are between Rs 50 billion and Rs 200 billion. These  are considered  more riskier than large-cap stocks but less risky than small-cap stocks. These stocks   offer higher  growth potential than large-cap stocks.

  3. Small-cap stocks

 Small caps   usually include the start-ups or companies in the early stage of development are more volatile .

 

1. 
   

Shares/stocks -- tantamount ---excitement

Excitement!


Well ,when u make money u r bound to get excited ...

Though Paul Samuelson said :

"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas".

But 

U can trade like real estate magnets:

Say buy a lot of 1000 shares ,on 20% profit ,sell to get back what u invested in first place and keep shares equivalent to profit .That is keep your profit in terms of shares only ...

So after some time u will be playing with profit alone,by taking out all u invested ...'

Exciting !NO?