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How to identify Risk
Keep these Important things in mind before you invest in companies -
For risk averse people -
1.Market capitalisation is the value of company which is 20 thousand crore rs.
2.You should see operating profit margin more than 10%
3.Return on capital employed should me more than 15% - when company needs more money after investing their , Equity +debt = Capital employed . ( Check annual report of the company through website).
4. Debt equity ratio should be less than 0.5 . (website)
When all these parameters are fulfilled it then go to Fundamental analysis.
Fundamental Analysis
Analyse the nation , then the industry and then the company . --We will calculate the value of the share of that company .
The process of stock selection for long duration is known as Fundamental Analysis .
It is the method of measuring a security’s value .
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