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

Image
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…

Upper Circuit And Lower Circuit Explained


Circuits , you have heard this term various time in your life and everyone knows what a electric circuit is about but Wall Street also contained with some circuits, the only difference is Electric Circuits are based on Voltage where as Stock Circuits are based on Price. Higher and Lower end of price that a stock can hold on a particular trading day(intraday only). There is nothing much to know about Stock Circuits, this is just a basic concept that you need to understand and keep in mind before choosing a stock for Intraday Investing. The upper and lower circuit is regulated by Securities and Exchange Board of India (SEBI). The range of circuit is between 2% to 20% for any stock.

SEE ALSO : Blue Chip Stock To Gain Profit In Short Term

Lower Circuit : The minimum price at which price of a stock can fall on a particular trading day.

For e.g : If stock has circuit with Minimum limit of 10% on daily basis means, Stock price can decrease Upto 10%, i.e Stock with a price band of 10% that closes at ₹100 on the previous day, the price band will be ₹90.

The Lower circuit is also called Only Seller, this is because lower circuit happens when there are no buyers for a particular share or only sellers are there. At that time sellers are ready to sell the share at any price which leads to very high decrease in the price of that share.

Upper Circuit : The maximum price at which price of a stock can rise on a particular trading day.

For e.g : If stock has circuit with Maximum limit of 20% on daily basis means, Stock price can increase Upto 20%, i.e Stock with a price band of 20% that closes at ₹100 on the previous day, the price band will be ₹120.

CHECK OUT : Top 7 Stock In Range Of 200-300 For Long Term

The Upper Circuit also called Only Buyer, this is because Upper circuit happens when there are no sellers for a particular share or only buyers are there. At that time buyers are ready to buy shares at any price which leads to very high increase in the price of that share.

Note : The upper and lower circuit is mainly set at 5%, 10% or 20% level which varies for different shares and time of trading.

Circuit Condition : Circuit is not applicable for F&O ( Future and Options ) Stocks.

Comments

Popular posts from this blog

Use These Eight Steps For Easy And Time Saving Stock Analysis

10 Terms You Need To Know Before Reading Balance Sheet

What Is Balance Sheet ?