In FY2020 a number of Indian retailers reported sharply higher debt and sharply higher EBITDA in the same year. They had not borrowed more, and their stores had not become more profitable. The change was entirely presentational — and if you are screening companies on ratios without knowing this, it will mislead you. Explains the…
What is a Trading Account? And How It Differs From Demat
People often use “demat account” to mean the whole apparatus of buying shares. Technically it is only one of three accounts involved, and the trading account is the one that actually does the buying and selling. What is a Trading Account? A trading account is the account through which you place buy and sell orders…
What is Debt-to-Equity Ratio? Formula and Sector Benchmarks
Debt is not automatically bad. Used well, borrowed money lets a company build a factory it could not otherwise afford and earn more than the interest costs. Used badly, it turns an ordinary downturn into insolvency. The debt-to-equity ratio is the single fastest way to see which situation a company is in. What is the…
Ind AS 116 vs Ind AS 17 — What Actually Changed
Under the old standard, a company could lease an aircraft for fifteen years and show nothing on its balance sheet. The obligation existed, the payments were contractually committed, and analysts had to dig into the notes to find them. Ind AS 116 ended that arrangement — and the transition made several Indian companies look considerably…
What is an NFO? Why a New Fund Offer Is Rarely a Bargain
A new fund launches at ₹10 per unit while an established fund trades at ₹340. The ₹10 fund looks dramatically cheaper. It is not cheaper at all — and that single misunderstanding is what makes NFOs so effective to market and so often disappointing to own. NFO Full Form and Meaning NFO stands for New…
What is P/B Ratio? Price to Book Value Explained
A stock trading below its book value looks like buying rupees for paise. Sometimes it is. More often, the market has spotted something the balance sheet has not yet admitted. Telling those two situations apart is what the P/B ratio is actually for. What is the P/B Ratio? The Price-to-Book ratio compares a company’s share…
What is the Incremental Borrowing Rate? Ind AS 116 Discount Rates
The discount rate determines how large a lease liability appears on the balance sheet. Move it by two percentage points on a ten-year lease and the reported liability shifts materially — with no change whatsoever to the underlying contract. This is why auditors spend disproportionate time on a number that looks like a footnote. Technical…
What is Section 44ADA? Presumptive Taxation for Professionals
A freelance consultant billing ₹40 lakh a year has few real expenses — a laptop, some software, an internet connection. Maintaining full books and computing actual profit is disproportionate work for someone whose costs are obviously small. Section 44ADA is built for exactly that situation. Figures apply to AY 2026-27 (FY 2025-26). The Income-tax Act…
Lump Sum vs SIP — Which Actually Works Better?
The honest answer to this question is uncomfortable: lump sum investing produces higher returns more often than SIP does. Yet SIP remains the right choice for most people. Both statements are true, and the gap between them is entirely about behaviour rather than arithmetic. The Two Approaches Lump Sum SIP What it is Entire amount…
What is Book Value? Formula, Meaning and Limitations
A company’s balance sheet says it is worth ₹800 crore. The stock market says ₹6,000 crore. Neither is lying. They are answering different questions, and understanding the gap between them is one of the more useful skills in reading financial statements. What is Book Value? Book value is what a company is worth according to…