Some companies may opt to issue rights or share warrants as an alternative form of capital generation.

Companies that need to raise additional capital may do so by issuing additional shares of stock. However, raising additional stocks may dilute the value of existing shares, which may be a concern for shareholders.

These tools enable shareholders to buy additional stock or shares directly from the company at a discounted price in general.

The difference between EBITDA and EBIT is that Depreciation and Amortization have been added back to Earnings in EBITDA, while they are not backed out of EBIT. This guide on EBITDA and EBIT will explain everything you need to know!

A company while running its business needs to make some operating profits after meeting all its expenses. Operating profits are the ones that are left over after paying for the cost of making a product.

For example the raw material cost, the employee cost, the power and fuel cost, the new purchases, and the other expenses. Thus these are known as operating costs. So whatever is left after subtracting these costs from Sales is known as EBITDA.

Thus EBITDA means Earnings Before Interest, Tax, Depreciation, and Amortization.

EBIT on the other hand takes into account the depreciation and amortization and hence is also known as operating profits as it removes non-cash items from its books that actually remain on the Balance Sheet. Thus the operating profits do not look inflated due to high depreciation or amortization.

EBIT means Earnings before Interest and Tax.

While applying Technical Analysis using various chart trends, and drawing conclusions that might be profitable in the short-term trades, every investor should have a clear idea about the bigger picture that can influence a company’s valuation.

To have a holistic view of the securities that an investor wants to invest in, a combination of both Fundamental and Technical Analysis is deemed to be the most effective tool to predict the price movements in both the short term and long term.

What is Fundamental Analysis?

Fundamental Analysis refers to the method of analysing the economic and financial factors in the market to measure the intrinsic value of a security.

Fundamental Analysis believes that any macroeconomic factors like the state of the economy, inflation, or any fiscal or monetary policy taken up by the government might have an effect on the securities in the market.

Usually, Fundamental Analysis is done from a macro level first, where factors that dictate and affect the state of the economy are being analyzed.

Then, the analysts move on to the micro-level, where the analysts focus on the growth of a specific industry and look at company-specific factors like composition of Management, structural changes in management, etc.

Finally, the analyst concludes by calculating whether the security is currently overvalued or undervalued, as compared to its present value, and trade calls are made accordingly.

Components of Fundamental Analysis

The scope of Fundamental Analysis is vast and it covers a lot of elements. Some of the elements are discussed in this podcast.

Every business is started with a view to make gains and create wealth for self as well as for the shareholders. Thus rising business income is one criterion that every Investor and Entrepreneur looks forward to. Any Business house can only sustain when their Revenue sees growth.

Thus there can be a different kind of Business Model that each business can have but the motto is the same to increase Revenue and have growth in the business.

So different Kind of Revenues or Income can be :

https://www.elearnmarkets.com/blog/4-different-kinds-of-business-income/

Free Cash Flow tells us how much cash the company is generating after the payment of things such as taxes, payrolls, equipment, buildings etc.

Free cash flow is an important measure for understanding the profitability of a business. It’s difficult to manipulate and it tells us a better story of a company than other commonly used metrics like net income.

Free cash flow can be used by the company in many ways such as paying down debt, business expansion, or paying additional dividends to their investors.

It is an important fundamental parameter that investors should understand while doing a fundamental analysis of the company in which they want to invest in.

In this podcast, we will help you in understanding the basics of Free Cash Flow and how important it is when it comes to analyzing a company for investment.

Trading Strategies for the long term involve analysing the key financial ratios of a business to determine its financial health and to provide an estimate of the value of the business.

“We want to perceive ourselves as winners, but successful traders are always focusing on their losses” -Peter Borish, Chief Strategist, Quad Group.

Trading is a profession that dates back to the times of the Barter exchange. Two parties came together to strike a deal for goods that each party needed and the other had. That formed the basic groundwork of the system of trading.

A stock market is simply a place of congregation of buyers and sellers of stocks, which represent the ownership claims on businesses. These businesses may include securities listed on a public stock exchange and securities that are traded privately.

The first modern stock was traded on the Nieuwe Brug in Amsterdam for the Dutch East India Company in 1602. The first derivatives were traded in 1607 for that single company, with the dividend being distributed after some years. Futures trading and short-selling were also invented in Amsterdam after a few years.

As of May 2021, the Market Cap of the National Stock Exchange is US$ 3.1 Trillion, with a listing of 1952 companies.

Trading is a noble profession in India and is a subject of interest to thousands of traders. While there are many success stories, the market remains to be a place where people have lost a lot of money. The bottom line? Trading on emotions, by fluke and not following certain fundamental rules. Let’s discover some of the trading strategies to always stay in profit:

Here present 10 proven Trading strategies : 

Profitability ratios are financial ratios that are used by the investors for evaluating a company’s ability for generating income profit in relation to its revenue, operating costs, balance sheet assets, and equity shareholders during a particular period of time.

These ratios tell the investors how well a company is using its assets for generating profit and value to its shareholders.

A higher ratio is preferred as it usually means that the business is performing well by generating profits, and cash flow.

The ratios help in comparing similar companies of the same sector.

Are you planning to do a fundamental analysis of the companies in which you wish to invest in? But before that, you need to check the turnover ratios that will help you in analyzing how efficiently the company is utilizing its assets for generating income.

The turnover ratios are used for checking the company’s efficiency and how it uses its assets for earning revenue.

It compares the sales figures with the different assets for measuring how much of the assets are used for generating the number of sales.

In a business, many types of assets are required that are used for generating the revenue of the business so that the business can operate.

These ratios come under efficiency ratios as they help in measuring how a company is utilizing its different assets for achieving its revenue.

So when doing a fundamental analysis of the company in which you are planning to invest, check the below ratios for analyzing the company’s efficiency.

Do you know that there is an old saying in business that cash is king? Yes! For any small business, cash drives its income as it provides the business with the means to remain solvent for operating.

Business solvency occurs when there is enough investment in assets for covering its debt or liabilities by the company. Solvency ratios help us in measuring the extent to which a business can cover its liabilities during more than one year on in the year. These ratios help us in accurately measuring a firm’s liquidity and solvency compared to the ratios derived from either the income statement or balance sheet.

We should know how to develop and apply the information that we obtained from these ratios. So, in today’s podcast, we will discuss 5 ratios for cash flow analysis.

It’s the season of quarterly results again! Yes! It is mandatory for the listed Indian companies to file their quarterly results with the stock exchange every quarter for the four quarters ending in June, September, December and March. The March results will also include the annual results of the company.

In an era of dynamic changes, quarterly results have become important to analyze the ongoing performance of the company. These days, companies give us quarterly results and guidance for the next few quarters that serve as an essential insight for the analysts in the stock market.

If you are an investor in the stock market and like to analyze companies on your own, these questions will pop up like how to analyze quarterly results and how to read the quarterly results of a company?

So, in today’s podcast, let us discuss 9 things to look for in these quarterly results