Using Net Margin as a Warning Sign

Hi friends, in this post, I would like to share with a financial sign which will alert me to avoid investing in particular stocks. Net Margin From investopedia, “Net Margin is the ratio of net profits to revenues for a company or business segment – typically expressed as a percentage – that shows how much of each dollar earned by the company is translated into profits. Net margins can generally …

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Understanding Financial Ratios

Numbers in the financial statements by itself gives us a decent understanding of the business. But as Albert Einstein mentioned, “All things are relative”. A business making $1million consistently may sound like a good business until you realize that the business requires $100million of capital to operate. Such a business only gives 1% return. We might as well put our money in long term bonds which carries minimum risk.   …

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PE RATIO & PEG RATIO IN VALUE INVESTING

Hi Friends I remembered years ago when I encounter with the uncles and aunties who got themselves in the stock market though many of them are speculating, they will be looking at charts, talking about the past prices of stocks, their intuition and gut feel and so on. The only thing that is probably close to the fundamentals that they talk about is P/E Ratio. I am going to explain …

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