Explained: Free cash flows, types, and valuation
Explained: Free cash flows, types, and valuation
As free cash flows provide a sound basis for evaluation, it is often considered that free cash flow models are more useful than DDM models, in practice.
Discounted cash flow, which is popularly known as DCF valuation, denotes the intrinsic value of a security...
Is Justified P/E ratio same as Standard P/E ratio? Let's find it out in the below article!
Is Justified P/E ratio same as Standard P/E ratio? Let's find it out in the below article!
Justified P/E associates a particular value of the P/E with a set of forecasts of the fundamentals and the dividend payout ratio.
The valuation of a company is a critical aspect for analysts and investors studying a potential company...
Explained: EV to sales ratio
Explained: EV to sales ratio
EV to sales ratio is one of the simplest multiples for valuation purposes. During the process of mergers and acquisitions, the ratio gives all parties a good idea.
Enterprise value-to-sales (EV/sales) is a financial ratio measuring the company’s total value (in...
Know what PEG ratio is!
Know what PEG ratio is!
The degree to which a result of the PEG ratio indicates an overpricing or underpricing stock varies according to industry and by company type.
PEG ratio is a company’s price/earnings ratio divided by its earnings growth rate over a period of...
Explained: Goodwill on the balance sheet of a company
Explained: Goodwill on the balance sheet of a company
Building goodwill builds value!
Goodwill is defined as the value of the reputation of a firm built over time, taking into consideration...
Explained: What is Option Synthetics?
Explained: What is Option Synthetics?
Some may say that synthetics are formed by using calls/puts/futures in a combination. However, honestly, you can design any kind of payoff chart by using options only.
In India, more than 90 per cent of the trading is done in the derivatives segment. However, the fun fact...
How ETFs came into being?
How ETFs came into being?
In recent years, ETFs, other than gold ETFs, also saw investors’ interest that has been gaining traction due to their low-cost structures & innovative themes.
Before starting, let’s take a quick glance at some figures! In India, between March 2021 and...
What is VIX and how to interpret VIX for profitable trading?
What is VIX and how to interpret VIX for profitable trading?
One of the best ways of profiting from India VIX Futures is by going long at lower levels ahead of a major event that promises to make markets volatile.
Volatility measures the frequency and magnitude of price movements that a financial instrument experiences...
Explained: Role of Margin of Safety in terms of investing
Explained: Role of Margin of Safety in terms of investing
The margin of safety (MOS) is referred to as one of the fundamental principles in value investing, where securities are bought only if their share price is trading below its approximated intrinsic value.
Benjamin Graham, the father of value investing and mentor of legendary investor Warren Buffett, pioneered...
Explained: What is a spin-off in corporate terms?
Explained: What is a spin-off in corporate terms?
In essence, a spin-off is similar to a de-merger or divestiture. It is better known as a starburst or spin-out.
A spin-off is an operational corporate strategy wherein the parent company separates a particular division...
Explained: Strategic asset allocation vs Tactical asset allocation
Explained: Strategic asset allocation vs Tactical asset allocation
After the asset allocation is determined, the portfolio managers distribute the capital both strategically and tactically to invest with a focus on what is best for each client.
The financial consultants or the portfolio managers determine the overall risk tolerance and objectives to...
A brief discussion on interpretation and limitations of 'Return on Equity'
A brief discussion on interpretation and limitations of 'Return on Equity'
Return on Equity is one ratio that is favoured by investors and also bears much importance. At times,...