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Showing posts from January, 2022

Top 3 Shares to Invest in 2022.

Do you also think that you can make a lot of profit from stock market in 2022? But I don't think so as the market has given healthy returns since the past 2 years. But there is an exception to it, there are some specific sectors which can make really good returns on investing. The companies that I will be recommending in this post are the leaders of their sector, and their financial statements are clean too. 1) CAMS (Computer Age Management Services) Many people say that this company's fundamentals have weakened, but I would like to tell that the fundamentals of this company are still very strong. It has 69% market shares in MFs and this company is a leader at it's sector. It is a monopoly business. Now let's look at the financials of this company. The net profit and the gross profit margin of this company are increasing year by year. The ROE of this company is 46.61% and the ROCE is 47.70% and has 0.00% debt. 2) SBI Cards and Payment services Why have I selected this s...

What is ROCE?

 While analyzing a company, financial ratios are very important. In this blog, I will explain a very popular ratio, Return On Capital Employed (ROCE). I will be covering the following topics: What is ROCE? How is it calculated? Where to find ROCE? What is the ROCE of a good company? Some important things to keep in mind. | What is return on capital employed? Return on capital employed, or ROCE is a profitability ratio of a company. It tells that how much profit a company is making on its capital employed. Capital employed means the money a company is using on it's business. | How is ROCE calculated? The formula to calculate the ROCE of a company is : ROCE = Earnings Before Interest and Taxes (EBIT) / Capital Employed. The EBIT (also known as Operating Profit) is given in the income statement of the company whereas Capital employed is given in the Balance Sheet. Capital Employed can be calculated by two methods - 1st method is : Total Assets - Current Liabilities, and the 2nd method...

What is ROE?

 In this blog, I will be answering the following questions - What is Return On Equity (ROE)? How is it calculated? What is the ROE of a good company? How should we use it? | What is Return On Equity (ROE)? ROE is a profitability ratio which tells that how much money a company is making by shareholder equity. Now let's see how it is calculated. | How is ROE calculated? The formula to calculate ROCE is : Net Profit / Average Shareholders equity. Net profit, also known as net income comes from the income statement of the company whereas the shareholders equity comes from the balance sheet. Example : If we talk about the company 'Prince Pipes', the company's net profit from the financial year 2020 is 113 crore rupees. The company's average shareholders equity is (Average Shareholders Equity + Closing Shareholders Equity) / 2 = (838 Cr. + 398 Cr.) / 2 = 618 Cr. Rupees. Like this, ROE = 113Cr. / 618Cr. = 18.3%. | What is the ROE of a good company? The ROE of a good compan...