10 Financial Terms of Investing explained 🧵🧵

1) EBITDA
2) PAT
3) ROE
4) ROCE
5) D/E Ratio
6) Acid Test Ratio
7) Working Capital Turnover
8) PE
9) PS Ratio
10) Interest Coverage

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1) Earnings before Interest Tax Depreciation & Amortization (EBITDA) margin -

It shows how efficiently an organization is operating.

Ratio = EBDITA / Net Sales

EBITDA = Operating Income (EBIT) + Depreciation + Amortization

EBDITA Margin of 10% and more is considered good.
2) PAT Margin -

Its similar to EBDITA Margin, the only difference is - it is calculated after taxes.

PAT Margin = [PAT/Total Revenues]

A good margin will vary considerably by industry, but as a general rule of thumb, 5% is low, 10% is avg and 20% can be considered high
3) Return on equity

It indicates how much return the shareholders are making over their initial investment in the company

ROE - [Net Profit / Shareholders Equity* 100]

Generally 15%+ ROE can be considered to invest in a company with a good cashflow and low debt.
4) ROCE - Return on Capital Employed

Return on Capital employed indicates the overall return the company generates considering both the equity and debt

ROCE = [Profit before Interest & Taxes / Overall Capital Employed]

ROCE of 15% and above is considered good
5) Debt to Equity Ratio -

It can be measured directly from Balance sheet - [Total Debt/Total Equity]

D/E Ratio < 1 = Safe
1 < D/E < 2 = Moderate
D/E > 2 Aggressive and risky

Lower is better, means funds can be arranged easily

But then again depends on Sector to Sector
6) Interest coverage Ratio -

The interest coverage ratio is a debt and profitability ratio used to determine how easily a company can pay interest on its outstanding debt.

IC Ratio - [Earnings before Interest and Tax / Interest Payment]

Higher is better
7) Acid Test Ratio -

The acid-test ratio is a measure of how well a company can satisfy its short-term (current) financial obligations.

Ratio - {Currents Assets - Inventories}/Current Liabilities

Ideally, a business should have an acid-test ratio of at least 1:1
8) Working Capital Turnover -

Working capital turnover ratio indicates how much revenue the company generates for every unit of working capital.

Working Capital Turnover = [Revenue / Average Working Capital]

Higher the working capital turnover ratio the better it is
9) P/S - Price/Sales Ratio

This ratio compares the stock price of the company with the company’s sales per share

Price to sales ratio = Current Share Price / Sales per Share

One can easily find overvalued and undervalued stocks using this ratio and by comparison with peers
10) Price to Earning (P/E) Ratio

P/E = Stock Price/ Earning per Share

P/E indicates how expensive or cheap the stock is trading at - lower is better

Compare PE of similarly placed companies to find undervalued gems.
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More from My First Stock

A thread full of Learning Threads🧵🧵

1) How to Read candles
2) How to use Trading view Screeners
3) How to create custom screeners
4) Find Multibagger stocks
5) Intraday chart analysis
6) Fundamental terms
7) Straddle buying strategy

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1) Candlestick analysis


2) Trading View


3) Create custom screeners


4) Find Multibagger Stocks
7 Screener Ideas for Intraday Buying

A Thread 🧵🧵

Tested - Executed in Real - Works

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1) Buy a Gainer when bounce from VWAP

Condition apply to chart ink -

- Stock days' gain > 1%
- Candle Low < VWAP and Close > VWAP
- Now check chart manually

You will get list of stocks that are gainers and consolidated to bounce from VWAP

https://t.co/W7HVmFvYpy


2) Near Day High

- Top gainers make 3-4 times new High in a day
- Best to enter when it break High of one wave
- Check charts manually after you get list

This screener gives you stocks that are near day High

Apply this with Time frame 3 or 15 min -

https://t.co/ocM7Whvtdi


3) Stocks at Resistance -

Conditions to apply -

- Stock day's gain > 1%
- High of Last 3-4 candles is equal

Apply like this -


4) Bullish Engulfing -

Very Good Signal for Intraday buying any time frame

Here is the screener -

Change Time frame according to

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॥ॐ॥
अस्य श्री गायत्री ध्यान श्लोक:
(gAyatri dhyAna shlOka)
• This shloka to meditate personified form of वेदमाता गायत्री was given by Bhagwaan Brahma to Sage yAgnavalkya (याज्ञवल्क्य).

• 14th shloka of गायत्री कवचम् which is taken from वशिष्ठ संहिता, goes as follows..


• मुक्ता-विद्रुम-हेम-नील धवलच्छायैर्मुखस्त्रीक्षणै:।
muktA vidruma hEma nIla dhavalachhAyaiH mukhaistrlkShaNaiH.

• युक्तामिन्दुकला-निबद्धमुकुटां तत्वार्थवर्णात्मिकाम्॥
yuktAmindukalA nibaddha makutAm tatvArtha varNAtmikam.

• गायत्रीं वरदाभयाङ्कुश कशां शुभ्रं कपालं गदाम्।
gAyatrIm vardAbhayANkusha kashAm shubhram kapAlam gadAm.

• शंखं चक्रमथारविन्दयुगलं हस्तैर्वहन्ती भजै॥
shankham chakramathArvinda yugalam hastairvahantIm bhajE.

This shloka describes the form of वेदमाता गायत्री.

• It says, "She has five faces which shine with the colours of a Pearl 'मुक्ता', Coral 'विद्रुम', Gold 'हेम्', Sapphire 'नील्', & a Diamond 'धवलम्'.

• These five faces are symbolic of the five primordial elements called पञ्चमहाभूत:' which makes up the entire existence.

• These are the elements of SPACE, FIRE, WIND, EARTH & WATER.

• All these five faces shine with three eyes 'त्रिक्षणै:'.
APIs in general are so powerful.

Best 5 public APIs you can use to build your next project:

1. Number Verification API

A RESTful JSON API for national and international phone number validation.

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2. OpenAI API

ChatGPT is an outstanding tool. Build your own API applications with OpenAI API.

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3. Currency Data API

Currency Data API provides a simple REST API with real-time and historical exchange rates for 168 world currencies

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4. Weather API

Real-Time & historical world weather data API.

Retrieve instant, accurate weather information for
any location in the world in lightweight JSON format.

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