The P/FCF (Price to Free Cash Flow) ratio is a valuation metric that compares a company’s market price to its free cash flow per share. It’s used to assess whether a stock is overvalued or undervalued, based on how much real cash the company generates after expenses and investments. 🔍 Formula: ✅ Free Cash Flow…
1. What is Price Trend? 👉 In Simple Terms: A price trend tells you which direction a stock price is moving over time. 🔁 There are 3 main types: 🎯 How to Spot a Trend: Imagine you’re watching the price of a stock: Day Price Monday ₹100 Tuesday ₹104 Wednesday ₹108 Thursday ₹112 Friday ₹116…
✅ In Simple Words: Dividend Yield tells you how much money a company gives you back (as dividend) for every ₹100 invested in its stock. It’s like interest you earn from your shares — just like earning interest from a bank FD. 🧮 Formula: Dividend Yield = (Dividend per Share ÷ Market Price per Share)…
In layman’s language, an economic moat is: “A company’s special advantage that protects it from competitors and helps it make big profits for a long time.” Think of it like a moat around a castle 🏰 — it protects the company from rivals just like a moat protects the castle from enemies. 💼 Why It…
In simple layman’s language, Free Cash Flow means: “The actual cash a company has left over after paying for its daily business needs and maintenance of its assets (like machines, buildings, etc.).” It’s the real money a company can use for: 🧮 Formula: Free Cash Flow (FCF) = Operating Cash Flow – Capital Expenditures 🏪…
PEG stands for Price / Earnings to Growth ratio. In simple layman’s language: The PEG ratio helps you know if a stock is overvalued or undervalued by looking at: 🔹 The P/E ratio (Price to Earnings)🔹 And the company’s expected growth rate 🧮 PEG Ratio Formula: PEG Ratio = (P/E Ratio) ÷ (Earnings Growth Rate)…
EBIT stands for Earnings Before Interest and Taxes. In simple, layman’s terms: EBIT tells you how much profit a company makes from its core business operations, before paying any interest on loans and before paying taxes. 🧮 EBIT Formula: There are two common ways to calculate EBIT: 🏪 Simple Example (Grocery Shop): Let’s say: Then:…
In simple layman’s terms, the Debt-to-Equity Ratio (D/E Ratio) tells you: “How much money a company has borrowed (debt) compared to how much the owners/shareholders have invested (equity).” 🧮 Formula: Debt-to-Equity Ratio = Total Debt ÷ Shareholders’ Equity 🏪 Example (Small Shop): Let’s say you run a small business. Now calculate: Debt-to-Equity Ratio = ₹2,00,000…
ROA (Return on Assets) tells you: “How much profit a company earns for every rupee it has in total assets.” It shows how efficiently a company is using what it owns (its buildings, machines, vehicles, etc.) to make money. 🧮 Simple Formula: ROA = Net Profit ÷ Total Assets × 100 🏪 Layman’s Example: A…
🏪 Imagine You Run a Small Shop You buy goods for ₹60 and sell them for ₹100.You also pay for shop rent, salary, electricity, and other expenses. 🔹 1. Gross Margin (Basic Profit from Selling Products) 👉 What it tells you:How much money you made after subtracting the cost of the product you sold. 🧮…
