In the realm of financial analysis, understanding operating profit is crucial. It serves as a key measure of a company’s operational efficiency and profitability. However, it is essential to grasp its limitations and consider it in conjunction with other metrics. This article explores the significance of operating profit, its components, calculation, and interpretation. It will…
The Price to Free Cash Flow (P/FCF) ratio is a valuation metric that compares a company’s stock price to its free cash flow. By dividing the stock price by the free cash flow per share, the P/FCF ratio provides insight into how much investors are willing to pay for each unit of cash generated by…
Let me tell you a story of the Chaiwala, the Software Engineer, and the Secret of Free Cash Flow. So, a few years ago, I was sipping chai at my regular spot near my office – you know, that tiny little stall run by Sharmaji, who makes the best ginger chai in the area. I overheard a…
Our Stock Engine’s effectiveness does not come from its fancy reporting style. It comes from its underlying algorithm that makes the complicated stock analysis more interpretable for its users. Ultimately, the purpose of any stock tool is to highlight if a stock is worth investing or not. The latest update is focused completely on making…
The Indian aviation sector has been facing turbulent times in recent years. On 02-May-2023, Go First Airlines (Founded as GoAir) voluntarily filed for Bankruptcy. On the date of writing this article. the airline company has canceled all flights till 12-May-2023. I’ll try to explain why in a buoyant and growing economy like India, Indian Airline…
In our lookout for growth stocks, we know that looking only at past returns will be grossly incomplete. Hence, we’ve learned to focus on profit growth in our analysis. But what if I tell you that profit growth is also not enough? It is also essential to check the degree of profitability of the company….
While the discounted cash flow (DCF) model is a widely used method for valuing stocks. But it is not without limitations. Let’s examine the limitations of discounted cash flow (DCF) model. The limitations are with respect to present value calculation based on the future growth rate, cash flow estimation, and discount rate. The article will…
Share buybacks have emerged as a powerful tool for Indian companies to optimize their balance sheet and improve shareholder value. In this article, we explore the ins and outs of share buybacks and their impact on the financial health of Indian companies. Investors can potentially benefit from participating in a share buyback. When a company…
During this Adani-Hindenburg saga, there is a concern that the LIC Investment portfolio is over-exposed to Adani Group company’s stocks. I think this concern looks misplaced. Out of the total capital of LIC, only 17% (INR 60.6 lakh crore) is invested in stocks. My estimate is that, out of these 60.6 Lakh crores, LIC’s exposure…
The EV/EBITDA ratio is a financial metric that is commonly used to judge the valuation of a company. It is often used as an alternative to the (P/E) ratio. The EV/EBITDA ratio is considered to be a more comprehensive valuation metric. In this article, we’ll learn more about this ratio. EV/EBITDA Calculator Use this calculator…
Shares issued at a premium are a common practice among companies. It is especially true during times of growth or expansion. But what does it mean, and why do companies do it? In the article, we will explore the concept of shares issued at a premium and the reasons behind it. We’ll also see the…
The stock market for beginners can be intimidating and confusing. This article will serve as your guide to stock investing. It’ll provide an overview of key concepts like fundamental analysis, portfolio diversification, and risk management. With the right mindset and strategies, investing in the stock market can provide significant returns over the long term. #1….
