Stock Investing is Complicated? Yes, stock investing can be complicated. Why? Because one must learn few skills before going full-out into the stock market. What skills are necessary? To answer this question, we need to know what a successful stock investor does differently than others. They have three distinct qualities:  First , they have an eye for good companies.  Second , they know how to read and interpret the financial statements of companies.  Third , They have the patience to hold their stocks for the long term.  These are the three main traits, learning which people can transform themselves into successful investors. But add to it another skill and, a person can see a transition into a pro-investor.  Knowledge of a company is the key. But know-how about the  other competing companies of the sector  can give a definite investing edge.  It is not necessary that only a ‘management degree’ holder can invest...

FintechStock48-Abhishek Sarda   What is market capitalisation?  Market capitalisation is also known as market cap. It describes the total market value of the total shares held by shareholders of a company.  Let’s take an example to understand the market cap better.  XYZ Company has 10,000 outstanding shares in the market, and each share of the company is Rs. 50. The market capitalisation of a company is calculated with the following formula.  Market cap = outstanding shares x price per share                   = 10,000 x 50 = 5,00,000 Therefore, the market capitalisation of XYZ Company is Rs. 5,00,000. Types of market capitalisation In 2017, the Securities and Exchange Board of India (SEBI) established a few regulations to categorise companies according to their market cap. There are three market capitalisation types:  1.  Small-cap Companies with a market capitalisation of less than Rs. 5,000 cr....

What are bonus shares? When companies, despite being profitable, are unable to pay out their accumulated profits as dividends, they offer bonus shares to their existing shareholders. The bonus shares are offered to shareholders in proportion to their current holding levels. Companies that have dried up liquidity and are facing a shortage of cash in their balance sheet resort to bonus shares as a means to reward their shareholders. Bonus shares are a medium through which companies convert their accumulated earnings into share capital. So, in a way issuing bonus shares saves the company from the liability to pay out dividends and helps shore up cash reserves. It’s important to understand that bonus shares don’t involve any cash flows in and out of the company. The net asset base of the company remains intact, and only the share capital is altered. Why do companies issue bonus shares? The last thing a company would want is the shareholders losing faith in the company. Non-payment of divid...

  20 financial terms you must know Table of Contents :- 1. Asset 2. Annual Report 3. Balance sheet 4. Blue-chip 5. Bonds 6. Capital gain 7. Cash flow 8. Credit 9. Depreciation 10. Earnings per share 11. Equity 12. IPO 13. ITR 14. Liability 15. Liquidity 16. Market capitalisation 17. Mutual Funds 18. Net worth 19. ROI 20. Volatility 1.  Asset Assets are simply a resource with a monetary value that a company owns. They are meant to provide future benefits to the business. Assets are created or bought to increase the company’s value or benefit its operations. You can also understand them as something that may generate cash flow, enhance sales, or reduce expenses. Assets are reported on a company’s financial statements. They are broadly classified into two categories: Current assets:  They are short-term economic resources. It is expected that they will either get consumed or converted into cash within a year. Examples of current assets are cash, prepaid expenses, inventory, ...