Personal Finance is all about managing your money to meet your financial goals. It includes budgeting, saving, investing, and planning for your future. The goal is to make smart decisions with your money so you can live comfortably, pay off debts, save for big purchases, and prepare for retirement. Whether you’re handling everyday expenses or planning for long-term goals, personal finance helps you stay in control of your finances and make the most out of what you earn.
The debt-to-equity (D/E) ratio measures the financial leverage of a company by comparing total debt to equity and indicating how much of the financing comes from debt compared to shareholders’ equity. A high leverage ratio indicates a higher reliance on debt, potentially increasing risk but also enabling growth, while a low leverage ratio indicates conservative
The price-to-book ratio (P/B) ratio is a financial ratio that compares the market value of a company with its book value and helps investors assess whether a share is overvalued or undervalued. It is calculated by dividing the market price per share by the book value per share. A low price-to-book ratio may indicate an
The Face value, also known as par value, is the original price of a share or bond set by the issuing company. In the case of shares, it represents a fraction of the company’s share capital and has only a minimal impact on the market price, which is influenced by supply and demand. For bonds,
There are many methods to determine the value of shares. Investors are prepared to pay the market value to buy a share. You can think of book value as the net asset value of a stock. Many well-known investors use book value to determine the fair price of a stock, which ultimately helps them in
The price/earnings ratio (P/E ratio) compares a company’s share price with its earnings and helps investors to assess whether a share is overvalued or undervalued. It is calculated as market price per share ÷ earnings per share (EPS) and reflects market expectations. A high P/E ratio often signals growth potential, while a low P/E ratio
One advantage of investments is that they generate passive cash flow. Some companies share a percentage of their net profits with their investors. The distribution of ordinary shares is optional and yields on the market are relatively low. However, there is a method by which investors can achieve a consistent and high return. Let us
Earnings per share (EPS) is a financial indicator that shows investors whether the company is profitable. EPS is calculated by dividing a company’s net profit by the number of shares outstanding. Savvy investors take a company’s earnings per share into account when making investment decisions. Understanding how it affects stock selection can help you make
The market capitalization, or “market cap,” is the value of a company’s publicly traded shares multiplied by its current share price. According to their market caps, companies are classified as small-cap, mid-cap, and large-cap, with each category presenting varying levels of risk and growth potential. The market cap of a company does not directly affect