Sunday, 27 September 2015

How to pick financially strong stocks

These below terms are very important in picking financially strong stocks that can be very profitable in long terms so try to pick stocks historical data and performance on the basis of below given terms on yearly basis in Balance sheet of particular stocks:


Earnings Per Share 
Book Value
PE ratio
promoters stake
market cap
institutional  investor
Investment Valuation Ratios
    Face Value
    Dividend Per Share
    Operating Profit Per Share (Rs)
    Net Operating Profit Per Share (Rs)
    Free Reserves Per Share (Rs)
    Bonus in Equity Capital

Profitability Ratios

    Operating Profit Margin(%)
    Profit Before Interest And Tax Margin(%)
    Gross Profit Margin(%)
    Cash Profit Margin(%)
    Adjusted Cash Margin(%)
    Net Profit Margin(%)
    Adjusted Net Profit Margin(%)
    Return On Capital Employed(%)
    Return On Net Worth(%)
    Adjusted Return on Net Worth(%)
    Return on Assets Excluding Revaluations
    Return on Assets Including Revaluations
    Return on Long Term Funds(%)

Liquidity And Solvency Ratios
    
    Current Ratio 
    Quick Ratio 
    Debt Equity Ratio
    Long Term Debt Equity Ratio



Debt Coverage Ratios

    Interest Cover
    Total Debt to Owners Fund
    Financial Charges Coverage Ratio
    Financial Charges Coverage Ratio Post Tax
    

Management Efficiency Ratios
    
      Inventory Turnover Ratio
      Debtors Turnover Ratio
      Investments Turnover Ratio
      Fixed Assets Turnover Ratio
      Total Assets Turnover Ratio
      Asset Turnover Ratio
      Average Raw Material Holding
      Average Finished Goods Held
      Number of Days In Working Capital
      
Profit & Loss Account Ratios
     
       Material Cost Composition
       Imported Composition of Raw Materials Consumed
       Selling Distribution Cost Composition
       Expenses as Composition of Total Sales


Cash Flow Indicator Ratios

       Dividend Payout Ratio Net Profit
       Dividend Payout Ratio Cash Profit
       Earning Retention Ratio
       Cash Earning Retention Ratio
       AdjustedCash Flow Times

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