Finance

In one of our earlier articles, we have discussed the price to earnings ratio, which is popularly known as P/E ratio or P/E multiple. In this article, we will tell you how to calculate price to sales ratio, and whether it is considered as the king of the value factors.The price to sales ratio is used as a profitability analysis tool to discover undervalued and overvalued … [Read more...] about Price to Sales Ratio: Is it the king of the value factors

Solvency ratio measures the company’s ability to pay its long term debt obligations. Solvency ratio provides information related to the adequacy of cash flow and earnings to cover interest, other fixed costs and principal payments as they come due.In other words, solvency ratio measures the size of a company’s profitability and compares it to its obligations to assess the … [Read more...] about How to calculate solvency ratios and measure financial leverage of a company

The most basic tendency of traders is to buy stocks at a price level that they consider is very low and to sell a stock at a price that they consider is relatively high. When the majority of traders believe that price is relatively low, buying pressure overtakes the selling pressure and the price generally goes up. Likewise, when a majority of traders believe that a … [Read more...] about What is dynamic support and resistance levels in stock market

In simple words liquidity means how quickly you can get your hands on cash. In other words, how quickly you can get your money whenever you need it.For a company, liquidity means how quickly a company's assets can be converted to cash when it's bought and sold, or whenever you need cash.To measure liquidity of a company or organization, certain universal financial … [Read more...] about Importance of liquidity ratios in financial analysis

Asset turnover ratio (ATR) measures the company’s ability to generate sales or turnover relative to the value of assets. It is used as a financial indicator by analysts to take an investing decision.Higher asset turnover ratio indicates that the management is more efficient in generating revenue from its assets. In contrast, a low ATR indicates inefficiency of the … [Read more...] about How to calculate asset turnover ratio