Price-to-Sales Ratio: A Poor Indicator of Value
The price to sales ratio is a marginal valuation ratio at best. It is really an offshoot of an antiquated concept of valuing a business.
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Value Investing
Value investing, in its simplest terms, means buy low, sell high, the universal primary tenet of business. Value investing is defined as a systematic process of purchasing high-quality stocks at an undervalued market price, quantified by intrinsic value and justified through financial analysis, then selling the stock promptly upon market price recovery.
This site teaches the investor about the four core principles of value investing. There are various in-depth sections, including tutorials about intrinsic value and security analysis.
Furthermore, there is a membership-only section that utilizes a Value Investment Fund with eight pools of different industries and 60-plus potential investments that are monitored regularly. This Fund has a six-year history of 25% annualized returns.
Performance Ratios
The most common thought among business owners, consultants, investors and students is the ‘bottom line’. The proper word is of course ‘PROFIT’.
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Leverage Ratios
Leverage ratios refers to the use of borrowed funds to increase the profits of the company.
Value Investing
Value investing is a concept of buying and selling stocks based on business fundamentals and not as a reaction to news or market trends.
Price to Cash Flow
The price to cash flow ratio is a valuation tool used to assist buyers and sellers of stock in determining timing of purchases or the disposition of shares.
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Activity Ratios
The majority of activity ratios measure the ability of the company to turn assets into earnings.
20 Private Industry Sectors
The gross domestic product comprises 20 private industry sectors and two government groups. All together 22 distinct sectors contribute to the gross domestic product (GDP).
20 Private Industry Sectors Read More »
Liquidity Ratios
Liquidity ratios are a group of ratios used to measure the ability of a business operation to meets its current obligations.
Insolvency – Detection
Insolvency refers to the ability to pay bills in a timely manner. It does not mean bankruptcy but long-term insolvency is a underlying factor of bankruptcy.
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Return on Equity
Another performance ratio used in business is return on equity. It is similar to return on assets except return on equity uses one section of the bottom half of the balance sheet.