The Stock Stethoscope

HOW TO ANALYSE A COMPANY’S FINANCIALS

Analyzing a company’s financial statements is an essential task for investors, analysts, and other stakeholders. There are three primary financial statements that provide crucial information about a company’s financial health: the income statement, balance sheet, and cash flow statement. Here’s a breakdown of each statement and what they reveal: Income Statement: The income statement provides…
HOW TO ANALYSE A COMPANY’S BUSINESS MODEL AND INDUSTRY

Understanding a company’s business model and industry is important for various reasons, such as making informed investment decisions, assessing its competitive advantages, and identifying potential risks and opportunities. Here are some steps you can take to better understand a company’s business model and industry: Read the company’s financial reports: The company’s annual and quarterly financial…
DIVERSIFICATION AND IT’S IMPORTANCE IN INVESTING

Diversification is a risk management strategy used in investing to spread out investments across a variety of different assets, industries, and geographic locations. The idea behind diversification is to minimize the impact of any one investment or market sector on an overall portfolio, as underperforming investments will be offset by better-performing ones. Diversification is considered…
BEST TIMEFRAME ON CANDLESTICK CHARTS

The best candlestick time frame depends on the trading strategy and the time horizon of the trader. Candlestick charts can be constructed using different time frames, ranging from a one-minute chart to a monthly chart. 1-minute chart: This timeline is used for very short-term trading, and it provides a detailed view of price changes over…
STOCKS SPLIT, DIVIDEND STOCKS & BONUS SHARE

Stock Split Stock split, occur when a company increases the number of outstanding shares by issuing more shares to existing shareholders. The goal of a stock split is typically to make shares more affordable for individual investors, making it easier for them to purchase and own a piece of the company. For example, if a…
10 MACROECONOMIC FACTORS AND THEIR IMPACT ANALYSIS

Macroeconomic factors refer to the broader, overall factors that affect the performance of an economy. Here are 10 such macroeconomic factors and their impact: 1. Gross Domestic Product (GDP): GDP is the measure of a country’s economic output and its impact on the economy is significant as it indicates the overall economic growth. A growing…
TECHNICAL ANALYSIS :ADVANTAGES & DISADVANTAGES

Advantages of Technical Analysis: Focus on price and volume data: Technical analysis focuses on the price and volume data of a security, rather than its intrinsic value. This can provide valuable insights into market sentiment and help traders make informed investment decisions. Pattern recognition: Technical analysis involves identifying patterns in price and volume data, which…
IDEAL FINANCIAL RATIOS EXPLAINED

All financial ratios used for analysis in stock market with their ideal ratios. There are various financial ratios used for analysis in stock market. Here are some of the most commonly used ratios and their ideal ratios: 1. Price-to-Earnings (P/E) Ratio: The ideal P/E ratio is subjective and varies depending on the industry, the company’s…
METRICS COMMONLY USED IN FUNDAMENTAL & TECHNICAL ANALYSIS

Fundamental analysis is done in two ways: 1. Top Down Approach As the name suggests, a top to down approach is adopted. The analysis begins with overall conditions of the economy, narrows down to sectors poised to perform well depending on the various factors playing out in the economy (Like pharma sector was expected to…