Tutorial
Added on: December
26th , 2006
Corporations and
their shareholders are determined to make profits
from their business operations and make a good return
on their investment (ROI). In order to make good
profits, a firm needs to be run efficiently and
have sufficient cash flow to meet current liabilities
and short term debt (liquidity). You as a small
scale investor need to investigate the profitability
of a company in order to determine if it is both
liquid and it is being run efficiently. The way
to do this is by calculating the various profit
margin ratios available. We look at a few below:
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Tutorial
Added on: December
26th , 2006
One of the ways
of determining if a particular stock is strong is
by looking at that company's Balance Sheet. The
balance sheet will illustrate what the company owns
(current & long term assets), what it owes (short
& long term debt) and its position of financial
liquidity. You wouldn't want to invest in a company
that has trouble paying its short term bills now
would you? In this article, we will look at 3 of
the common accounting ratios that help determine
the financial position of a company. (View
Full Article)
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Tutorial
Added on: November
30th , 2006
An Option
is a contractual right given to an individual allowing
him to buy or sell an underlying asset (common stock,
derivatives, etc) at a specific price on or before
a certain date. Options are similar to stocks and
bonds in that they are all securities that have
strict defined terms and characteristics.
Take a real life example. Imagine
you want to purchase this piece of jewellery for
$50,000 but you do not have the cash upfront. However,
6 months later, you will have enough cash to afford
the jewellery. So you make a deal with the owner,
giving you the option of purchasing this piece of
jewellery for $50,000 in exactly 6 months from now.
However, to give you the right or this "Option",
the owner charges you $2500. From here, you stand
to either gain from the transaction or lose from
it. (View
Full Article)
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Tutorial
Added on: November
11th , 2006
Stock Beta is
a calculation or measurement of volatility or risk
of a stock trading on the stock market. It is the
fluctuation in stock prices and the market in general.
Some stocks have greater risk than others, and thus
carry higher Stock Betas. Stock betas are measured
using regression analysis.
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