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Term of the Week

Market Capitalization

Mar 11, 2019

Market capitalization, commonly referred to as market cap, is an important concept of stock market, particularly for mutual fund investors. Market capitalization of a stock is the share price of a stocks multiplied by the total number of shares outstanding. Investors use market cap to denote a company’s size. Many... Read More

Price Earnings Ratio

Mar 4, 2019

Price earnings ratio or PE ratio is one of the most important terms in equity investing. As the name suggests, it is the ratio of share price to earnings per share (EPS). In simple terms, it denotes how much you have to pay to buy Rupee 1 of EPS of a stock. A common use of PE ratio in investing is to see whether a stock... Read More

Operating Margin

Feb 25, 2019

Operating margin is defined as ratio of operating income and revenue of a company. Operating income is the profit of the company before paying interest and taxes. Operating margin is an important financial ratio and analysts look at this number carefully in the quarterly financial statements. Operating margin is an... Read More

Free Cash Flows

Feb 18, 2019

Free cash-flow is a commonly used term in stock analysis. It is the cash left for investors (both debt and equity investors) after cash-outflows for all expenses (excluding interest) and investments (in capital assets like plant, machinery etc). Some investors confuse free cash-flows with another accounting term, Earnings... Read More

Dividend Yield

Feb 11, 2019

Dividend yield is the dividend per share divided by the share price. Dividend yield is an important ratio in selecting stocks. High dividend yield stocks are more attractive, valuation wise, compared to low dividend yield stocks. Dividend yield, as such, is an important ratio for value investors. High dividend yield... Read More

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