Category: Finance

Two companies look similar on every financial ratio. In one, the founders own 62% of the shares and none are pledged. In the other, they own 28% and most of that is pledged to lenders. That difference does not appear in any profitability ratio, and it has ended more Indian investments badly than most valuation…

One company trades at a P/E of 18 and grows earnings at 8% a year. Another trades at a P/E of 40 and grows at 35%. The P/E ratio says the first is far cheaper. The PEG ratio disagrees — and for growing companies, PEG is usually the more informative comparison. What is the PEG…

The most common way a good investment plan fails is not a market crash. It is a hospital bill, a job loss, or a car repair arriving at the wrong moment — forcing you to sell equity investments at whatever price the market happens to be offering that week. An emergency fund exists to make…

A company reports ₹400 crore of profit. Impressive or not? It depends entirely on how many assets it needed to produce that profit. A company generating ₹400 crore from ₹2,000 crore of assets is running a very different business from one needing ₹40,000 crore to produce the same figure. What is Return on Assets? Return…

A relative tells you their investment will double in six years. Is that impressive? Divide 72 by 6 and you get 12 — they are claiming roughly 12% a year. Now you can judge it. That single division is the Rule of 72, and it turns vague investment claims into numbers you can evaluate in…

When the Nifty falls 5%, some stocks fall 2% and others fall 9%. Beta is the number that describes that relationship — how much a particular stock tends to move relative to the market as a whole. What is Beta? Beta measures a stock’s sensitivity to movements in the overall market. It compares how much…

You invested ₹5,000 every month for three years — ₹1.8 lakh in total — and your portfolio now shows ₹2.3 lakh. What return did you earn? The obvious answer of 27.8% is wrong, and understanding why is the point of XIRR. What is XIRR? XIRR stands for Extended Internal Rate of Return. It calculates the…

Two funds both return 12% a year over a decade. One does it in a fairly steady line. The other alternates between +45% and −25%. The destination is identical; the experience is completely different. Volatility is the word for that difference — and it explains why investors in the second fund often earn far less…

A company reports ₹320 crore of current assets against ₹200 crore of current liabilities — a healthy-looking current ratio of 1.6. Then you learn ₹250 crore of those assets is unsold inventory sitting in a warehouse. If bills came due next week, that inventory would not help. The quick ratio is built to expose exactly…

A stock you own is up 20% and you cannot sell it. Another has fallen 20% and there are no buyers at any price. Both situations are circuit limits doing what they were designed to do — and understanding them matters most for anyone holding small caps or SME stocks. What is a Circuit Limit?…