1. What is the significance of Bull and Bear symbols in the stock market?
The Bull market denotes the financial market term which defines prices are rising or are expected to rise. Bear markets are just the opposite which denotes falling prices and is market expected to fall. Both come like an animal attack their opponent.
2. Benefits of Investing in a debt-free company?
Debt free firms are preferable as they are able to manage their funding requirements predominantly through internally generated cash and thus they are cash-rich firms. They have a low-interest rate risk. Their less debt balance sheet firms indicate that they are conservative in nature.
3. Factors to look while Investing in a particular company?
Investors must not only to look whether a company is debt free or debt-heavy but also look as nature of the industry as it decides the operational risk, how much debt is raised if possible, whether it will return higher return to equity shareholders.
4. What are the valuation and business potential?
Business model and potential to survive in the long run needed. It is important to understand the nature of business and risks associated with it. Debt based on expected free cash flow is truly the outcome of business potential.
5. What are the ratios an investor can look at while investing in a company?
Financial ratios help a lot in making out information for financial statements and to investments in a company. For performing ratio analysis we need mainly Income Statement, Most recent stock price, balance sheet. There are 15 ratios that are the indispensable part of every research while investing in a company. They are categorized in price ratios such as Price-to-Earnings Ratio (P/E), PEG Ratio, Price-to-Book Ratio (P/B), Dividend Yield, Dividend Payout Ratio. Another category is profitability ratios such as Return on Assets (ROA), Return on Equity (ROE), Profit Margin. Debt ratios are Debt to Equity Ratios, Interest Coverage Ratio, Asset Turnover Ratio, Inventory Turnover Ratio.
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