Understanding financial ratios is an essential part of analyzing stocks and other investments. These ratios can give investors insight into a company’s financial health, profitability, and ability to generate cash flow. This article will cover the most commonly used financial ratios, including the price-to-earnings ratio, the price-to-book ratio, and the return on equity ratio, debt-to-equity ratio and explain how investors can use them to evaluate a company’s financial performance.
Tag: ROE
Profitability and Shareholder’s Equity: A Look at Return on Equity in India
Return on Equity (ROE) is a metric that measures the profitability of a company in relation to the equity of its shareholders. It is a commonly used metric to evaluate the performance of a company, and is often used by investors to pick stocks to invest in. In this article, we will explain the concept of ROE in simple terms, including the formula for calculating ROE and the pros and cons of using it as a metric for picking up stocks to invest in, particularly for Indian audience.