Fundamental analysis....

Discussion in 'Money Matters' started by Shanvy, Nov 17, 2007.

  1. Saraswathipv

    Saraswathipv IL Hall of Fame

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    Thanx once again , Shanvy.
    Will keep in touch..

    bye
     
  2. gokusha

    gokusha IL Hall of Fame

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    Hi Shanvy,

    Youa re doing very good job, though few people like us invested.....we need basic knowledge to do it with full effort..In that way you are really helping us in gr8 way by sharing your knowledge...Please continue it.

    Thanksalot,
    USHA
     
  3. Shanvy

    Shanvy IL Hall of Fame

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    Hi usha,

    Thank you. it is only half done. have to complete . may be next week...have guests this whole week...

    yes. even though we go by instincts, tips, i feel doing it after learning how to read the fundamentals, would add an edge to the same....

    happy trading...so you are long term/short investor or speculator....???
     
  4. Arunarc

    Arunarc Moderator Staff Member IL Hall of Fame

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    Hi Shanthi
    Just reading all your thread I usually go:spin:spinwondering what you are??
    A financier, an accountant, a poet, a writer, in marketing etc etc.
    But came to know you are an engineer not bad all in one person along with a good housewife too:hatsoff to you. You have drafted these and analysised so well even a stupid person can understand it. I am a commerce person with accounting and all with dad CA and bro is a stockbroker so can understand these stuff well as have grown up in that enviroment. And would help dad a lot in all these matters. It was nice to peep into this thread of yours it was really nice to get these information as at present had not kept in touch with all this nice to refresh my mind again.
    Thanks for sharing such nice information.
     
  5. Shanvy

    Shanvy IL Hall of Fame

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    hey aruna yaar,

    Have been seeing stocks traded from my school days..dad was into it big time...even in those days.....keeping track of the physical shares, dividends, going to the bank ..applying and paying..in the concerned bank..glued to the 4.00 clock news on the stock market trend..taking notes for dad...
    so learning started from there....then with the demat, the news channels going big on the markets and too much information, and also veda's push..again started learning them..still taking small steps....

    you can also put in your inputs here.......
     
  6. Arunarc

    Arunarc Moderator Staff Member IL Hall of Fame

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    It is really nice to know more about you it was great you kept it up even today. I would have surely put in some but now at present I lost touch of all these stuff. Now sourronded with all science people, one with his research work and the other stepping into engineering. With all the formulas and all going on at home sometime I feel i am a bumbobonk. But reading all this surely remembered helping dad and discussing on these issues it was great. It use to be fun going for auditing and all. Helping people on finacial matters.

     
  7. Shanvy

    Shanvy IL Hall of Fame

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    hi aruna yaar,

    Reading it helped you remember discussions..so a little more time here would make you discuss those discussions and your lessons..and thoughts....waiting for that..
     
  8. Shanvy

    Shanvy IL Hall of Fame

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    Book Value:

    How much is the company worth..and it that justified in the price of the stock…


    So how do we go about trying to find it…. One of the ways you term value is market capital or in simple words if you or how much money would you need to buy every single share of stock at the current price at which it is being quoted in the market.


    Another way is to go to the balance statement and look at the Book Value. The Book Value is simply the company’s assets minus its liabilities.

    Book Value = Assets - Liabilities


    A company that has a feasible growing business will always be more be worth more than its book value for its capacity to generate earnings and growth.


    To compare companies, find the book value per share, which is the book value divided by the outstanding shares..
     
  9. Shanvy

    Shanvy IL Hall of Fame

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    Price to book value..\


    P/BV (Price to book value) is a ratio is arrived at by dividing the market price of a share

    with the respective company's book value per share.

    P/BV figures for companies in the services industries like software and FMCG most probably will be high when compared to steel, banking or auto…as the software and fmcg will have less fixed assets. On the books when compared to the steel….so in case of the companies with large amount of assets and investments the ratio of P/BV is a good yardstick to measure the value of the stocks.

    Like the P/E, the lower the P/BV the better the value. Investors would use a low P/BV for instance, to identify prospective stocks.
     
  10. Shanvy

    Shanvy IL Hall of Fame

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    Dividend Payout Ratio (DPR)



    It is again a ratio that measures what a company pays out to investors in the form of dividends…


    You calculate the DPR by dividing the annual dividends per share by the Earnings per Share.
    DPR = Dividends per Share / EPS



    For example, if a company paid out Rs1 per share in dividends and had EPS Rs.3, the DPR would be 33%. (Rs1 / Rs3 = 33%)


    Now whether 33% is really good or bad is again a question to ponder….bonk
     

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