Before Investing in a stock you should know some of the important ratios
Investing in stocks requires careful analysis of financial data to ascertain the true value of the company. In general, this is achieved by analyzing the profit and loss record, balance sheet , and cash flow statement of the company. That can be cumbersome and time-consuming. One easy way to find out about the results of a company is by looking at the financial figures, most of which are readily accessible on the internet. Although this is not a foolproof process, it is a good way to perform a fast check on the health of a company. I’ll give you eleven financial ratios to look at before you invest in a stock. DEBT-TO-EQUITY RATIO It shows how much a company is leveraged, that is, how much debt is involved in the business vis-a-vis promoters' capital (equity). A low figure is usually considered better. But it must not be seen in isolation. "If the company's returns are higher than its interest cost, the debt will enhance value. However, if it is not, sharehold...