Interest coverage ratio measures the creditworthiness of a company by comparing earnings before interest and taxes (EBIT) with the interest. Its a financial ratio that measures company’s ability to make payments for debts. In other words, it gives a better picture to know the short-term financial health of a company.Here is the formula to calculate the ratio:Interest … [Read more...] about How to calculate Interest coverage ratio
How to calculate debt to assets ratio
Ratio analysis is designed to reveal financial strength and weaknesses of a company. By comparing company’s ratios to industry standards and competitors. you can easily know whether its financial position has been improving or deteriorating over the years.Before analyzing financial statements of a company, we suggest you to examine quality of financial data available to … [Read more...] about How to calculate debt to assets ratio
Financial statement analysis: The basics for non-accountants
Financial statement analysis is used by analysts to evaluate an investment in some kind of security such as equity or debt. In order to arrive at a decision or recommendation, analysts are required to evaluate the financial performance, position and true value of the company from its financial statements.The role of these financial analysts is to take the published … [Read more...] about Financial statement analysis: The basics for non-accountants
Why and How to analyse company’s income statement
A publicly traded company has to compulsorily publish its income statement in addition to other financial statements for a quarter or year to the public. These statements are to be filed with the government and stock exchanges as per the rules and regulations of the country.Income statement is also known as profit and loss account. It depicts the total revenues, cost of … [Read more...] about Why and How to analyse company’s income statement
Why Fundamental Analysis Isn’t Enough: Ten Key Limitations
Fundamental analysis helps investors determine the intrinsic value of a security by evaluating a company's financial health, performance metrics, and growth potential, enabling informed investment decisions.By focusing on underlying economic and financial factors, fundamental analysis encourages a long-term investment strategy rather than short-term speculation.But, … [Read more...] about Why Fundamental Analysis Isn’t Enough: Ten Key Limitations