What is Profit&Loss (P&L) Statement ?

Definition : Also known as Income statement, is a financial statement which shows expenses and revenue of a company during a particular period, usually a fiscal quarter or year.
Read : What Is Balance Sheet ?
Income Statement helps to convey the status of a company i.e. Company is making profit or suffering losses. It is very important to read Income Statement of a company before investing, both of recent and past years.
Note : Revenue : Total amount received from sales of goods and services. Expenses : Total amount spend in producing final product or service.
Structure of P&L Statement  Income Statement is divided into Five main section - Net sales, Cost of Goods Sold, Gross Margin, Operating Expenses and Net Profit Before & After Income Tax (Or Net Loss in case of Loss).
Net Sales : It is the sum of Gross sales excluding its returns, allowances and discounts.Cost Of Goods Sold : Amount of money used to produce the final product. For example cost of inventory, merchandise purchased…

Five Key To Success In Stock Market

Gaining wealth in stock market is not a easy job, it take lots of effort and time. Investment requires proper plan and deep research. And also investor need to have lots of patience to gain good returns. Most of the people mistakes investment as it requires lots of money to gain good return but, its a myth, Rakesh Jhunjhunwala is a great example, he started his investment with only ₹6000 and made billions with his intelligence. Investment does not require more cash, it requires more knowledge and research. In this article, i will tell you 5 key that can help you to convert yourself into a successful future investor.

Long Term Vision :  ‘Plan before you start Investing’. Planning your portfolio is very helpful to clarify your investment motive. Every investor invest with same motive of earning money but there are slight differences. For example, some invest for short-term returns, some for very long term, some for their retirement and so on. Here we can see common motive is to earn pr…

What Is Balance Sheet ?

Definition : It is a financial statement which represents assets, liabilities and shareholder’s equity of a company at a specified point in time. It shows Income and Expenditure of a company in that period.

Read :Terms You Need To Know Before Reading Balance Sheet
Balance sheet is divided into two parts :
AssetsLiabilities + Shareholder’s equity

Assets  Definition : Any tangible and intangible resource which can produce positive economic value for a company or individual is called assets. In simple words, any resources which helps you to earn money is called assets. It is placed on left-side of the balance sheet.
Example : Inventories and Equipment of a company, account receivables. If you a buy a house and allot it on rent to earn money then it is a asset to you.
Check Out :8 Steps For Quick Fundamental Analysis

Structure : 
Current assets : Current assets are the assets that a company holds for less than a year. It generally includes :
Account receivable ( within a year )Cash and cash equiva…

10 Terms You Need To Know Before Reading Balance Sheet

For Stock Analysis you need to read the Balance Sheet of a company. But before reading balance sheet you need understand some basic terms related to balance sheet. Here, I will explain every term in basic language that make you understand very easily.

Learn :What Is Balance Sheet ? Depreciation
Definition : It is the decline in the value of money or assets with time. 
Example : If you purchase a car at the price of one million. After 3 year that car will not remain with the same value. As time passes value of goods increases while of money decreases. Another example, Your grand father used to buy full bag of fruits and vegetables in just ₹100, but now days you will only get fee kilos of fruits and vegetables in ₹100. And this is what depreciation is.
Depreciation has exception. Price of Land or property(real state) which is a asset, always increases with time. 
Formula :  Depreciation : cost - salvage value / no. of useful year
Check Out :8 Steps For Quick Fundamental Analysis
Salvage Value

Key Financial Ratios You Must Need To Know Before Investing

A ratio is a comparison of one number to another. Similarly, Financial ratio is the comparison of two financial values of a company taken form the company’s financial statement. Financial ratios indicates profitability and efficiency of a stock. How much company earns from its each share, a stock price is overpriced or underpriced, etc. such information can be obtained just by knowing the value of different financial ratios. There are various financial ratios but i will discuss here six basickey ratio which are very important to know for value investing.
Check Out :Use These Eight Steps For Easy And Time Saving Stock Analysis Earning Per Share - EPS Definition : Earning per share is defined as the portion of company’s profit allocated to each outstanding share of Common Stock. In common words, it is a part of profit that a company earns from each issued share.
Formula : EPS = Net income ÷ Total No. Of Outstanding Share Read More
Price To Earning ratio - P/E ratio Definition : also known as p…

Use These Eight Steps For Easy And Time Saving Stock Analysis

Stock Analysis is a very important part of investing. Searching a value stock is  not a easy job, it takes lots of effort and time to find a stock with good fundamentals and that can give good future gains. Analysis is used to  predict future performance of a stock by properly analysing its present and historical data. We always need to aware of changes made by the companies, and also change in rules and regulations by government. 

Stock analysis is very important if you are planning for long-term investment as you need to go through every fundamentals and accounting of a company including its management and future plans before investing. Every successful investor always suggest to analyse a stock both technically and fundamentally before investing, this will help you to reduce risk factor and increases greater probability of gaining good future gains. Analysis is the key of Intelligent Investor.
There are basically two types of Stock analysis - Technical analysis and Fundamental Analy…

Debt To Equity Ratio - D/E ratio

Before moving to D/E ratio first we need to understand difference between debt financing and equity financing.
Two main types of financing : 1. Debt Financing : Taking loans from banks which need to pay back in specified time with additional fees or interest.

2. Equity Financing : Company raise funds from public through IPO, in exchange company offers ownership equity to the public. Company no need to return the money and therefore no additional fees is charged. One who buy shares called shareholders. Shareholders earn money through Capital appreciation and dividends.

Learn More In Detail :What Is Financing ? - Definition and Its Types D/E ratio 
Definition : Debt to equity ratio used to know the relative proportion of company’s finance from debt and shareholder’s equity. In simple words, how much capital a company holds from debt and shareholder’s equity.
Formula :

D/E ratio = Debt ÷ Equity In Standard words,

D/E ratio = Total Liabilities ÷ Shareholder’s equity *Total liabilities = debt + c…