Ratio Analysis

The Stock Market is more or less a numbers game. You see numbers everywhere, in every form and at every stage of the trading journey. Developing a keen eye for numbers or more precisely, Ratio Analysis becomes imperative to the cause.

These are the numbers that help an investor understand a company’s, stock’s, asset’s performance in the trading world. These ratios, in other words, paint the whole story about their strengths and weaknesses.

But then again, it’s easier said than done. We are looking at formulas for ratio analysis and a lot of them. We don’t like to prejudice anyone, but formulas can prove to be a scary prospect for many. 

This process carries multiple struggles. For instance – understanding these ratios is one, remembering them can be another. 

Since gaining an understanding of these financial ratios is hugely important for every trader who is already a part of, or someone keen on taking the plunge in the trading world, they will look for stock market courses to upgrade their learning. 

Stock Pathshala is the place for them to be. Our free textual course Ratio Analysis has been tailored for such traders.

Contents of the Course – Ratio Analysis

Through this course, a learner will get to learn about the ratio analysis types, ratio analysis advantages, and why ratio analysis is important.   

The content matter of the course has been partitioned in 6 chapters aimed at making the learning path structured and streamlined.

Chapter 1 – Efficiency Ratios

This course talks about the various Efficiency Ratios employed by shareholders to study a company’s performance. Efficiency Ratios are preferred by many as they tend to paint a clearer picture of the overall efficiency of a business.

Some of the efficiency ratios discussed in this chapter include – Asset Turnover Ratio, Accounts Payable Turnover Ratio, Account Receivable Turnover Ratio.

Chapter 2 – Growth Ratio

The name gives away its contents. The chapter covers the topic of growth ratio metrics which helps to ascertain a company’s development potential. 

We take a look at the various factors that are taken into account while studying and establishing a layout for a company’s growth. 

Also, we discuss some of the most commonly used growth ratios in this chapter. For example – metrics like Earning per Share (EPS), Price To Earning (P/E) ratio.

Through this, a learner will develop a fair share of understanding of measuring a business’s upwards trajectory. 

Chapter 3 – Return Ratios

Next on our list of contents for this course is Return Ratios. Here we learn about the metrics that help in estimating the profitability of a business.

Return on Assets (ROA), Return on Equity (ROE) are among the return ratios we discuss in this chapter. We take the help of examples for simplifying these compound terms for our learners and also provide tips that help better estimate the returns.

Chapter 4 – Cash Flow Ratios

We learn about the various cash flow ratios involved in analyzing the cash flow of a company. Learners get to discover the ratios that help in determining a business’s financial muscle.

Some of the ratios talked of in this chapter include – Current Liability Coverage Ratio, Cash Flow Coverage Ratio, Price To Cash Flow Ratio.

Chapter 5 – Solvency Ratios

This chapter is dedicated to informing a learner about solvency ratios, otherwise known as leverage ratios. We take a look at all the ratios that help make a comparison between a business’s earnings, profits to its debt and liabilities. 

Equity Ratio, Debt to Equity Ratio, Debt Ratio all constitute the contents of the chapter. 

Chapter 6 – Valuation Ratios

Regulars in the Stock Market, trade analysts employ the valuation ratios for ascertaining a stock’s value. These are essential to the cause of assessing your investment opportunities. 

Later in the course, we take a look at some of the most prevalent terms in the stock market. Some of the ratios discussed in this article include – Price to Book Ratio (PB Ratio), Price to Earnings per Share (P/E Ratio).

Conclusion

Ratio Analysis is an indispensable part of trading. A person who is considering the prospect of entering into the Stock Market must have a familiarity with these metrics.

Without an understanding of these, a trader can hardly make a move in the stock market. 

Stock Pathshala is an e-learning platform dedicated to imparting information about the stock market. Through the free textual course, Ratio Analysis seeks to solve the conundrum regarding the topic. 

This free textual course can be accessed through our free app Stock Pathshala that can be downloaded from the Google Play Store. Currently, the app is available only to Android users.

Stock Pathshala is a dual-language e-learning platform that educates learners through the means of courses. Soon, the courses will also be available in Gujarati, Tamil, Telugu languages as well. The platform houses video courses, audio podcasts, in addition to textual courses. 

Learners can access several of our introductory textual courses for free. However, if a learner wishes to enrol in our video courses, they will have to subscribe to our pro membership plan. 

Stock Pathshala offers :

Beginner Pro plan – valid for 1 month, 

Star Pro Plan – valid for 3 months,

Legend Pro Plan – valid for 1 year.

So, why wait? Just go ahead and install the Stock Pathshala App and get your learning kicked-off in Ratio analysis.