Question

Please provide a basic list of parameters (ratios and the "incalculables") that one should check before buying the shares of a company. A LIST WOULD BE REALLY APPRECIATED

Answer 1

Ratios are essential elements which reflect upon the company's performance. You can find them from the Consolidated annual statements.

here are the majority ratios :

1. the price-to-earnings ratio is the price a company pays for $1 of earnings.

2. the price-to-sales ratio is the price a company pays for $1 of sales. It is used when you are comparing two or more companies.

3. Return on assets

4. return on equity

5. debt to equity

6. OPERATING PROFIT MARGIN (OPM) It shows operational efficiency and pricing power.

7. current ratio

Other factors include:

1. The business model of the company

2. its competitors and their stocks

3. Strategic plans and investments they are making

4. past record of position, growth, and goodwill.