Tag Archives: Financial Parameters
The Second Secret Is Out: How to detect a Right Stock

The Second Secret Is Out: How to detect a Right Stock

In the first part of the series, ‘How to identify a right stock’, we spoke about the ‘Value Creation Index’, how it is calculated and why it holds so much importance in identifying a right stock, consequently leading to a good investment decision. Apart from VCI, there are various financial parameters, which come handy in gauging the financial strength of the company. This part of the series deals with a set of financial parameters that you must evaluate to know whether a stock is really ‘Right’ or not. Why are Financials so important? But, before we proceed, let’s try to find out why we need to look at financials at all. Financials have been and will continue to form the biggest chunk of a company’s evaluation as, all said and done, what makes or breaks any business is the bottom-line. That, in the end, is truly indicative of the company’s […]

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Stock Shastra #3: You just need to look at 6 Financial Parameters to shortlist a wonderful company!

Stock Shastra #3: You just need to look at 6 Financial Parameters to shortlist a wonderful company!

We said in Stock Shastra #2 that a wonderful business worth investing in has 3 important characteristics: An Excellent Financial Track Record, A Sustainable Moat and Respectable Management. The first one – An Excellent Financial Track record – is a Go/No-go criterion and hence is critical. It will prevent you from investing in the wrong companies and losing money. So, what comes to your mind when we talk about company financials? A big, fat, 100-page Annual Report with reams of data that leave most of us confused!  It seems too difficult, too complex, needing too much time – which you don’t have! However, truth is always simple. Let us now see a simple and powerful lens through which we can identify companies with an Excellent Financial Track record. The answer is Stock Shastra #3:  You just need to look at 6 Financial Parameters to shortlist a wonderful company! From all […]

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