LEARN STOCK MARKET

BOOK VALUE: In simple terms  "If company sold all its assets and paid up all liabilities and remaining amount divided in all shareholders then value (amount) what investors get per share is book value."  For example : If company has a assets of 100 cr and liabilities of 95 cr and total number of outstanding shares (total shares of company ) are 1 cr.  Then  Book value of company= 100 cr - 95 cr                                           =5 cr. Now 5 cr divided by 1 cr (total shares outstanding) 5 cr ÷ 1 cr =5 Rs. (Booka value of shares) MARKET VALUE: " it will give you idea about how much premium or discount investors willing to pay." Market value = total outstanding shares × curren share price. Market value = 1 cr × 7 Rs (assume)                         = 7 cr market value  Market value pr share = 7cr ÷ 1cr                                        = 7 Rs. It means investors willing to pay 2 Rs of premium for every share of this company.

Dow theory was created by Charles H Dow and they are the person introduced indices to the stock market for first time. What is the Dow theory? Dow theory is financial theory that says the market is in an upward trend if one of its averages advances above a previous important high and is accompanied or followed by a similar advance in the other average. Not get it ?? Don't worry example given below will make this easy. For example- If NIFTY makes new high than Sensex is expected to follow nifty How this theory works? 1. The Market Discount Everything: In simple language whether it is Risk factors or whether it is Opportunity in market discount everything with data or information market have. (In fact price tells everything) if price increase there are hopes for opportunities in market and prices decrease there are in fear of risks. 2. Three primary market trends: For long term(about 10 years) there are three trends 1. Up trend 2. Down trend 3. Sideways trend

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors.  Advantages of mutual funds: Increased diversification: A fund diversifies holding many securities. This diversification decreases risk. Professional investment management: Open-and closed-end funds hire portfolio managers to supervise the fund's investments. Service and convenience: Funds often provide services such as check writing. Government oversight: Mutual funds are regulated by a governmental body. Transparency and ease of comparison: All mutual funds are required to report the same information to investors, which makes them easier to compare to each other. Lower cost: The cost of a single investor

CAGR is a term for the geometric progression ratio that provides a constant rate of return. Formula and Calculation of CAGR Where  V(final)  is the end(final) value, V(begin) is the initial value t is the number of years. For example  If xyz company has a profit for last few financial year are like  Year             profit 2016            20000 2017            26000 2018            27000 2019            31000  Then CAGR =(31000/20000)^1/3 -1            =(1.55)^1/3-1            =0.157            =15.7% CAGR is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Investors can compare the CAGR of two alternatives in order to evaluate how well one stock performed against other stocks in a peer group or against a market index. CAGR does not reflect investment risk. Comparing CAGRs of business activities across similar companies will help evaluate competitive weaknesses and strengths.  These are CAGR ap

EBITDA is a company's earnings before interest, taxs, depreciation and amortisation. It is generally used to comparison of profitability between two companies by discounted the effect of interest payment. EBITDA can be used to compare companies against each other and industry averages. EBITDA=Net Income+Interest+Taxes+Depreciation +Amortisation EBITDA can be used as a shortcut to estimate the cash flow available to pay the debt of long term assets. EBITDA, however, can be misleading because it strips out the cost of capital investments like property, plant, and equipment. Negative EBITDA indicates that a business has fundamental problems with profitability and cash flow.

Vista Equity Partners will pick up a 2.32 percent stake in Jio Platforms for Rs 11,367 crore at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. The US-based private equity firm that runs the world's largest exclusively tech-focused fund. This is the third high-profile investment in the Reliance Industries Ltd (RIL) unit. In less than three weeks now, Jio Platforms has raised Rs 60,596.37 crore from leading technology investors. Vista's investment is at an 12.5 percent premium over the Facebook deal announced in April. Vista has a track record of investing in cutting edge tech companies in their early stage. Each of its investments have been profitable in its history of 10 years. This is Vista's first sizable investment in India. Source- moneycontrol.com

In P&L statement there are two parts  1 Incomes  2 Expenses  Let's see in detail  1 Incomes or Revenue: A- Revenue from operations: these earnings are from main business of a company. For ex- if company has a business of cement manufacturing than Revenue from sales of cement is considered in this. B- Other operating revenue: these earnings are from besides main business. (Ex- rent, Interest etc) C- Total revenue : sume of A and B  2. Expenses: A- Cost of materials consumed: amount used in material cost of raw material (for ex in cement manufacturing raw materials are limestone, clay, silica) B- Operating and direct expenses: Amount which use to operate business ane direct expenses like salary, rent, marketing expense, etc. C- Employee benefit expense:employees receive these benefits besides their wage like insurance, pension etc.  D-Financing costs: are defined as the interest and other costs incurred by the Company while borrowing funds. They are also known as “Finance Costs”