6 Best Financial Ratios to Select Stocks [Examples | Stock Market For Beginners

6 Best Financial Ratios to Select Stocks with Examples | Stock Market For Beginners [Hindi]
In this video by FinCalC TV, we will see Best Financial Ratios to Select Stocks with Examples in hindi. We are going to see working capital ratio, quick ratio, earnings per share, PE ratio, debt to equity ratio and return on equity ratio in detail in this stock market for beginners series, share market for beginners
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CHAPTERS:
00:00 Best Financial Ratios to Select Stocks Intro
01:20 Financial Ratio - Working Capital
03:08 Working Capital Ratio Example
05:27 Financial Ratio - Quick Ratio
06:04 Quick Ratio Example
08:02 Financial Ratio - Earnings per share (EPS)
08:24 Earnings per share Example
11:21 Financial Ratio - PE Ratio (Price to Earning)
12:15 PE Ratio Example
14:29 Financial Ratio - Debt to Equity
15:16 Debt to Equity Ratio Example
16:43 Financial Ratio - Return on Equity
17:27 Return on Equity Ratio
19:03 Conclusion
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After watching this video following queries will be solved:
Best financial ratios to select stocks
what are financial ratios
financial ratio kya hota hai
which financial ratios to check in companies
good financial ratios
stock market for beginners
share market for beginners
WHAT ARE FINANCIAL RATIOS IN STOCK MARKET?
- Financial Ratios are the math numbers we find using the data from financial statements of the company such as income statements, balance sheet and cash flow statement
- Not everyone can go through all the numbers in these financial statements and that is the reason some important financial ratios are first assessed and analyzed for a specific company and compared with other companies in same industry
- If these financial ratios meet the conditions of investor, he / she can further analyze the financial statements of that company to decide whether to invest in the stock or not
- Thus financial ratios play an important role in screening the stocks to invest in them
1. Working Capital
Working capital is defined as how capable the company is to pay off all the current liabilities from the cash it is having right now. This parameter can help us know if the company has enough cash to cover its next 12 months liabilities. If yes than the company is in good financial state and if not than the financial status of the company needs to be improved.
Working Capital Ratio = Current Assets / Current Liabilities
2. Quick Ratio
Quick Ratio is similar to working capital ratio but after removing inventory and prepaid expenses from the assets, since inventory cannot be liquidated easily. Below is the formula for quick ratio:
Quick Ratio = Current Assets - Inventory and prepaid expenses / Current Liabilities
3. EPS (Earning per share)
EPS full form is Earnings per share which is another important financial ratio to check while selecting stocks. EPS is defined as the net income or earnings divided be total number of outstanding shares of the company. This defines the earnings of the company per share of the company.
Below is the formula for EPS (Earnings per share) of the company:
EPS = Net Income / Total number of outstanding shares of the company
4. P/E Ratio (Price to Earnings)
5. Debt to Equity Ratio
6. Return on Equity
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DISCLAIMER:
Examples and demo used are for Illustration purpose only and might not cover every detail of examples shown.
I Am Not A SEBI Registered Adviser. All The Information Provided By Me Are For Educational/Informational Purposes Only. We Do Not Take Any Responsibility For The Accuracy Of The Data But As It May Contain Typographic Or Other Errors And Inaccuracies And We Expressly Disclaim Liability For Any Errors On The UA-cam Channel (FinCalC TV). Please consult your Financial Advisor before taking any decision or action in terms of your Finances.