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An Annual Report is more than just numbers; it gives great and more useful insights about company and its business. It highlights the company’s future prospects and management concerns. As a careful reader, we need to focus on following key parts of an annual report –
What is the Return on Average Assets (ROAA) / Return on Assets (ROA) Ratio The Return on Average Assets (ROAA) is similar of the Return on Assets (ROA) but a thin difference is that current value of assets is used to evaluate the ROA, and average value of assets is used to evaluate the ROAA. … Read more
The Return on Equity (ROE) is one of the most important ratios to assess a company. It is considered as a conservative ratio to analyze a company, however, only ROE analysis is not enough; the analysis of other ratios is necessary to make an investment decision. To calculate ROE, company’s net profit is used as numerator and the total of average equity of shareholders is used as denominator.
Audit is a systematic process of examining the financial statements of public companies to verify its accuracy, fairness and compliance with certain standards such as – International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP).
Profitability Ratios: Definition, Types and Use in Businesses
Profitability Ratios are most important metrics used for financial analysis of a company and its business. Profitability ratios show how profitable a company and its business at different levels of profitability. Profitability ratios determine that is a company worthwhile to invest or not.
जानिए कंपनियों के top executives और उनके कार्यों के बारे में
The insights of these ratios are useful when it is compared with historical trend of a company itself and its peers. In other words, these ratios for a company gives valuable insights for decision making when a company is compared with industry peers, or historical data of itself. It is better to compare for same period such as – comparison of a year’s first quarter with the first quarter of the previous year to measure quarterly change on YoY (Year-on-Year) basis. Consecutive quarters are also compared to know the change.
12 Biggest Investment Mistakes People Make. Learn How to Avoid It –
There are many investment mistakes that individuals make with their investment decisions, which are as follows –
1. Understanding –
Not knowing what they are buying, to wit, a very large number of people don’t actually understand the industry, company and business model, in which they are willing to invested or have already invested.
Treasury Stock: Strategy of Company Behind It l It’s impact on Balance Sheet and 4 limitations
Definition
When a company buys back its shares, it is known as “Treasury Stock” until the company resell or cancel these shares. It is also known Share Repurchase or Share Buyback by the company.
Definition of Historical Cost Principle in Accounting: Stability in Financial Reporting l Learn 5 Important Differences Between Historical Cost Accounting and Fair Value Accounting: A Deep Dive
The Historical Cost is one of the most important concepts in accounting. In very simple words, “the monetary value what is paid to acquire the ownership of assets or what the business agreed to pay on the later date”. In other words, the monetary value of acquisition or original purchase price of an asset is called the “Historical Cost“.
How to calculate Market Capitalization to GDP Ratio l How to know that market is undervalued or not?
Definition
The Buffett Indicator is also known as the “Market Capitalization to GDP Ratio”. This ratio helps to assess the entire stock market of a country, not only a single stock. It is similar to price-per-sales ratio, which is used to analyse a single company, but the Buffett Indicator is used to assess all listed companies in an entire country. It is used to learn that the overall market is overvalued or undervalued.
The Buffett Indicator (Market Capitalization to GDP Ratio)
Abhishek Bansal 
