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Thursday, June 30, 2011

Different Types of Bonds

A bond is a debt security that is run by the government or an agency.

Following are some of the main types of bonds:

1) Corporate Bonds - These are issued by large corporations and have higher yields because there is a higher risk of a company defaulting as compared to government bonds.

2) Government Bonds - These are the bonds issued by government in its own currency. They are usually

Wednesday, June 29, 2011

Stock Option Markets and Contracts

Stock options give the holder the right, but not the obligation, to buy or sell the underlying security at a predetermined price within a fixed period of time. There are two different types of option contracts: put and call options. Exercising stock options is a simple process, you just need to contact your broker and inform them you want to exercise a given option in your portfolio.

The terms

Tuesday, June 28, 2011

Understand Equity Market - Preferred Stock

Preferred stocks (or preference shares) are different from common stocks. They generally do not have voting rights on matters of corporate policy, their dividends are fixed and preference dividends will be paid prior to common share dividends.

Generally, there are four different types of preferred stock: participating preferred stock, cumulative preferred stock, non-cumulative preferred stock,

Monday, June 27, 2011

How to Buy and Sell Shares Online

Buying shares online is typically cheaper than going through a traditional stock broker to buy and sell stocks, and thus you can save some money to purchase more shares.

Learning how to buy and sell shares online is quite easy, see below for more information:

1) The first step to buying shares online is to get registered with an online brokerage company. There are many popular online

Sunday, June 26, 2011

Difference Between NYSE And NASDAQ

The New York Stock Exchange (NYSE) is the largest stock exchange in the world. In 2010, the NYSE listed the largest U.S. IPO of 2010, General Motors, which raised $16 billion and facilitated the largest secondary capital raise in history with the $70 billion secondary offering by NYSE-listed Petrobras (NYSE: PBR).

NASDAQ is the stock exchange for industry leaders, recognized as one of the

Saturday, June 25, 2011

Tips For Selecting a Good Stock Market Report

In this volatile stock market it is very important to get a good stock market report with the latest trading news.

A stock market report is a valuable tool which tells you whether a company share is worth buying/selling and when to buy. It provides a summary of the recent news of stock market sectors and industries, stock groupings such as the NASDAQ average, Dow Jones Industrial Average, etc.

Friday, June 24, 2011

Redemption of Shares

Meaning of Redemption of Shares: A company can purchase its own shares in the open market if so authorised in the articles of association. These can be ordinary or preference shares. One of the main reasons for buying back own shares is to buy out a troublesome shareholder.

Shares can be redeemed in the following ways:

(1) Purchase of own shares out of the proceeds of new share issue:
Transfer

Thursday, June 23, 2011

Introduction to Stock Trading - A Few of the Basics

It is important to learn a few basic things about stock investment before you start trading.

The most basic investment strategy to make money is to Buy Low and Sell High. It is always best to buy stocks at a lower price and sell them when the price goes up. However it can be difficult to determine whether a stock's price will go up, down or sideways.

Stock trading can be done through a

Wednesday, June 22, 2011

Asset Management Firms in South Africa

The leading asset management firms/companies in South Africa include Coronation Fund Managers, Anglorand Capital, Capricorn Capital Partners, Old Mutual Investment Group (SA), among others.

Coronation Fund Managers is one of the largest asset management companies in South Africa. The firm has offices in South Africa, Botswana, Swaziland, Ireland and the United Kingdom. It also has a presence in

Tuesday, June 21, 2011

Top Largest Banks in Texas

The top largest banks in Texas (USA) are Frost Bank, Woodforest National Bank, Comerica Bank, Prosperity Bancshares, Amegy Bank of Texas, among others.

Founded in San Antonio in 1868, Frost Bank is the largest Texas-based financial institution that operates only in Texas. In 2008, Frost was the first bank in the nation to turn down federal funding under the Troubled Asset Relief Program (TARP)

Monday, June 20, 2011

Investment Banks in Italy

The leading investment banks in Italy include Mediobanca, Banca IMI, Banca Akros, J.P. Morgan, among others.

Mediobanca is the leading investment bank in Italy, offering high-quality advisory services and providing finance in all its various forms, from more traditional bank credit to the most sophisticated solutions available on capital markets. Its clients include some of the leading business

Sunday, June 19, 2011

Private Equity Firms in Brazil

GP Investments and AG Angra Investimentos are amongst the leading private equity firms in Brazil.

Founded in 1993, GP Investments is a leading private equity firm in Latin America. It was the first private equity firm to go public in Latin America and also the first private equity company in the world to issue perpetual bond. It is the oldest private equity firm in Brazil, founded in 1993.

AG

Saturday, June 18, 2011

Top Banks in Pennsylvania

The top largest banks in Pennsylvania (USA) are Sovereign Bank, Citizens Financial Group, National Penn, First National Bank of Pennsylvania, Fulton Bank, among others.

Sovereign Bank is one of the largest banking institutions in the Northeastern U.S., and is part of Santander Group. It offers a broad array of financial services, including retail, business, and corporate banking; cash management

Friday, June 17, 2011

Fastest Growing Banks in India

DBS India - It was awarded the coveted distinction of being 'India's Best Small Bank' and 'India's Fastest Growing Small Bank' as per the Business Today-KPMG Best Bank Rankings 2010. This distinction was further reinforced when Businessworld - PwC in their annual survey of India's Best Banks 2010 acknowledged DBS as the 'Fastest Growing Small Bank' (Balance sheet size less than Rs.30,000 crore).

Accounts Payable Turnover Ratio Analysis

Definition: Accounts Payable Turnover Ratio shows how many times trade payables turnover during an accounting period. A lower ratio may indicate that the firm is having difficulty to pay its creditors.

Formula:
Accounts Payable Turnover Ratio = Cost of Goods Sold / Average Accounts Payable

Example:
Makemoney Ltd has the following data:
Trade creditors at start of year: $10,000
Trade creditors

Thursday, June 16, 2011

Return on Shareholders Funds (ROSF) Ratio

Definition: The Return On Shareholders Funds (ROSF) ratio is a measure of the profit for the period which is available to the ordinary shareholders with the ordinary shareholders' stake in a business.

Formula:
Return On Shareholders Funds = ((Net profit after taxation & preference dividend) / (Ordinary share capital + Reserves)) * 100%

Example 1:
If the net income of PPC Ltd is $80,000 whereas

Wednesday, June 15, 2011

Days in Accounts Payable Ratio

Definition: Days in Accounts Payable shows how many days it takes to pay trade payable.

Formula:
Days in Accounts Payable = (Average Accounts Payable / COGS) * 365 days
Or,
Days in Accounts Payable = 365 Days / Accounts Payable Turnover

Example 1:
If credit purchases is $77,000; purchases returns $7,000; opening stocks $2,000; closing stocks $3,000; Average Accounts Payable $8,000.
Then,
Cost

Tuesday, June 14, 2011

Sales to Total Assets Ratio Analysis

Definition: Sales to Total Assets ratio indicates how efficiently the firm generates sales revenue on each dollar of assets. It is defined as the total assets divided by the turnover of the firm.

Formula:
Sales to Total Assets = Sales / Total Assets

Example:
BCD Company has the following information:
Total sales $500,000
Sales returns $20,000
Fixed Assets (Net book value) $180,000
Cash $30,000

Accounts Receivable Collection Period

Definition: Accounts Receivable Collection Period (also known as Days in Receivables) shows the average number of days it takes to collect all accounts receivable.

Formula:
Accounts Receivable Collection Period = (Average Accounts Receivable / Net Credit Sales) * 365 Days
Or,
Days in Receivables = 365 Days / Accounts Receivable Turnover

Example:
The following information relates to XYZ Company

Monday, June 13, 2011

SG&A to Sales Ratio

Definition: SG&A to Sales is the ratio of selling, general and administrative costs to sales. Selling, general, and administrative (SG&A) expenses represent most operating expenses including marketing costs, employee salaries, pension costs, insurance, etc.

Formula:

SG&A to Sales Ratio = (Selling, General & Administrative Expenses) / (Sales)

Example:
CPM Ltd has the following data:
Sales

Sunday, June 12, 2011

Accounts Receivable Turnover Ratio Analysis

Definition: Accounts Receivable Turnover Ratio calculate the number of times that trade receivables turnover during the accounting period. The higher the ratio, the faster the business is collecting its receivables.

Formula:

Accounts Receivable Turnover Ratio = Net Sales / Average Accounts Receivable

Example 1:
Total sales (include cash sales of $10,000): $70,000
Accounts Receivable: $50,000

Saturday, June 11, 2011

COGS to Sales Ratio

Definition: The cost of goods sold (COGS) to sales ratio shows the percentage of sales revenue used to pay for expenses which vary directly with sales.

Formula:

COGS to Sales ratio = Cost of Goods Sold / Sales

Example 1:
BPP Ltd. has cost of sales $100,000, sales for the year $200,000, sales returns $80,000. Then,
 Net sales = 200,000 - 80,000 = $120,000
 COGS to Sales ratio = 100,000 /

Friday, June 10, 2011

Cash Flow to Debt Ratio Analysis

Definition: Cash Flow to Long Term Debt Ratio compares the operating cash flow of a firm to its total debt (which includes short-term debt, the current portion of long-term debt and long-term debt). This indicates the firm's ability to cover total debt payment with its cash flow generated from operating activities.

Formula:
Cash Flow to Debt = Cash flow / Total debt

Example 1:
Golden Industries

Sales Growth Ratio Formula & Analysis

Definition: Sales Growth Ratio/Rate is a measure of the percentage increase in sales between the two time periods.

Formula:

Sales Growth Rate = (Current month's sales - Last month's sales) / (Last month's sales) * 100
Or,
Sales Growth Rate = (Current Year's sales - Last Year's sales) / (Last Year's sales) * 100

Example 1:
Sales in 2008 = $700,000
Sales in 2009 = $900,000
Sales Growth Rate = (

Thursday, June 9, 2011

Top Banks in Oklahoma

The top largest banks in Oklahoma (US) are BancFirst, Bank of Oklahoma, MidFirst Bank, First United Bank, SpiritBank, among others.

BancFirst is Oklahoma's largest state-chartered bank. The Company was recognized for the third consecutive year as one of America’s Best Banks by Bank Director magazine and has been ranked 11th among the largest publicly traded banks and thrifts nationwide.

Bank of

Sales to Current Assets Ratio

Definition: Sales to Current Assets Ratio is used to measure how well a company is making use of its assets in generating sales revenue. A high ratio may indicate deficient working capital.

Formula:
Sales to Current Assets = Net Sales / Total Current Assets
(Note: Current assets include Cash, Bank, Marketable Securities, Accounts Receivable, Inventories, Prepaid Expenses)

Example:
Euro Company

Wednesday, June 8, 2011

Top Asset Management Firms in Singapore

Following are the top largest asset management companies/firms in Singapore:

DBS Asset Management Ltd (DBSAM) - It is one of the largest and most experienced asset management companies in Singapore and South East Asia. The firm delivers effective investment management solutions for Asia-focused clients that cover a wide spectrum of asset classes, with core competency in Asian fixed income, Asian

Private Equity Firms in Germany

The leading private equity firms in Germany include AXA Private Equity, Deutsche Beteiligungs AG, HANNOVER Finanz Group, to name a few.

AXA Private Equity is a diversified private equity firm with an international network across Europe, North America and Asia. It has offices in Frankfurt, Paris, London, New York, Singapore, Milan, Zurich, and Vienna. The international offices foster synergies

Tuesday, June 7, 2011

Internal Rate of Return (IRR) Examples

Definition: The Internal Rate of Return (IRR) method is used in capital budgeting to compare the profitability of investments. It is also known as the discounted cash flow rate of return (DCFROR) or the rate of return (ROR). IRR is the discount rate that gives a net present value of zero.

Formula:
IRR = lower discount rate + (NPV at lower % rate / distance between 2 NPV) * (Higher % rate - Lower

Top Banks in Oregon

The top largest banks in Oregon (US) include Umpqua Bank, West Coast Bank, Bank of the Cascades, Pacific Continental Bank, South Valley Bank & Trust, among others.

Umpqua Bank, a subsidiary of Umpqua Holdings Corporation, has been ranked 25th on the 14th annual “100 Best Companies to Work For” list (FORTUNE magazine). It is the only Oregon company and community bank to make the list. Umpqua Bank

Top Venture Capital Firms in Canada

Following are the top venture capital firms in Canada:

GrowthWorks - It is Canada's leader in venture capital investing, based on dollars invested by managed venture capital funds during the period January 1, 2010 to January 1, 2011 outside of Quebec and excluding investments by government and government agencies. The firm managed funds invest in small and medium-sized Canadian businesses with

Monday, June 6, 2011

Net Working Capital to Total Assets Ratio

Definition: Net Working Capital to Total Assets ratio is defined as the net current assets (or net working capital) of a corporation expressed as a percentage of its total assets.

Formula:
Net Working Capital to Total Assets = (Net Working Capital / Total Assets) * 100%
(Note: Net Working Capital = Current Assets - Current Liabilities)

Example 1:
If a company has total amount of current assets

World's Most Profitable Banks

The best and most profitable banks in the world are the Industrial and Commercial Bank of China, China Construction Bank Corporation, Santander Central Hispano, BBVA, HSBC, among others.

The Industrial and Commercial Bank of China (ICBC) is the most profitable banks in the world based on 2008 earnings as per The Banker magazine, followed by China Construction Bank Corporation.

Based on

Advantages and Disadvantages of IRR

Internal Rate of Return (IRR) is the discount rate that makes the net present value of all cash flows from an investment project equal to zero.

Advantages of Internal Rate of Return:

1) This technique gives equal importance to all the cash flows. We just need to identify the point at which the present value of cash inflow is equal to present value of cash outflow.

2) It is a good method of

Sunday, June 5, 2011

Best Performing Banks in India

Indian Bank - Government of TamilNadu has conferred the Best Performing Bank Award to Indian Bank for the outstanding achievement under Self Help Group (SHG). It also received the Best Performer Award for Micro-Finance activities in Tamil Nadu and Union Territory of Puducherry from NABARD.

Canara Bank - The Bank occupies a premier position in the comity of Indian banks. It was named Best

Return on Net Assets (RONA) Ratio Analysis

Definition: Return on Net Assets (RONA) is used to measure the financial performance of a company, calculated by taking the net income and dividing it by the quantity of its fixed assets and net working income. The higher the ratio, the better the performance.

Formula:

Return on net assets = Profit after tax / (Fixed assets + net working capital)
Or,
RONA = Net income / Net assets
(Note: Net

Advantages and Disadvantages of ARR

Accounting rate of return (ARR) is a method of comparing the average profits you expect to the amount you need to invest. For instance, if a project requires an average investment of $50,000 and is expected to produce an average annual profit of $2,000, the ARR would be: 2,000 / 50,000 = 4%.

Advantages of using Accounting rate of return:

1) The main advantage is that it is easy to understand

Saturday, June 4, 2011

How To Buy Good And Cheap Stocks

Many investors like to invest in "cheap" stocks in the market because they can pick up a lot of stocks for little money only. However, most of the young stock market investors do not realize that the stocks they bought cheaply belong to a company involved in bad situation with poor management. You should avoid these kinds of stocks even how cheap they are!

How to buy cheap stocks? Stocks are

Inventory Conversion Ratio Analysis

Inventory Conversion Ratio indicates the additional amount of borrowing that is available upon the inventory being converted into receivable.

Formula:
Inventory Conversion Ratio = (Sales x 0.5) / Cost of sales
Inventory Conversion Period = 365 / Inventory Turnover Ratio

Example 1:
Company ABC has an Inventory Turnover of 8.5, and therefore the Inventory Conversion Period = 365 / 8.5 = 42.9 days

Accounting Rate of Return (ARR) Examples

Definition: Accounting rate of return (ARR, also known as average rate of return) is used to estimate the rate of return for an investment project. The higher the ARR, the more attractive the project is. If the ARR is higher than the minimum standard average rate of return, then we will accept the project. However, this technique does not take into account of the time value of money.

Calculation

Friday, June 3, 2011

When Is The Best Time To Buy Stocks?

Finding the right time to buy stocks is a key to success in the stock market. One of the basic principles of stock investing is to buy low and sell high. The best time to buy stocks is when the prices are as low as they will be. Following are the key factors and tips that you need to look at when finding the best time to buy stocks and shares:

1) The best time to buy stocks is during a recession

Contribution Margin Ratio Example

Definition: Contribution Margin Ratio (CM Ratio) is the percentage of contribution over total revenues.

Formula:
Contribution Margin Ratio = (Price - Variable cost per unit) / price
OR = Total contribution margin / Total revenue
(Note: Contribution margin = sales price - variable costs)

Example 1:
If the price of a product is $300 and the unit variable cost is $250, then the unit contribution

Operating Cash Flow Per Share

Definition: Operating cash flow per share is used to measure a company's financial strength and is widely used by financial analysts in valuing stocks. It gives a better guide as compared to the reported earnings per share (EPS) as earnings data can easily be manipulated while cash flow is more likely to be accurate.

Formula:

Operating cash flow (OCF) per share = (Operating Cash Flow -

Thursday, June 2, 2011

How To Find Stocks With High Dividends

Invest in stocks with high dividends will sustain you when the market is not doing well or in a downtrend. It is a great way to build long-term wealth as you will benefit from the dividend payments plus any appreciation in the overall price of the stocks.

Following are the tips and ways on how to find stocks that pay high dividends:

1) Find a website with searchable stock information such as

Price to Sales Ratio Formula & Example

Definition: Price to Sales Ratio (PSR or P/S ratio) is calculated by dividing the company's market cap by the company's revenue; or, dividing the stock price per share by the revenue per share. It indicates how much investor paid for a share compared to the sales generated (per share) by the company. A lower ratio is considered a better investment as the investor is paying less for each unit of

Cash Flow Ratios Analysis & Formula

Cash Flow Ratios are used to assess the cash position of the business. Following are the main cash flow-based financial ratios and the calculations:

Formula:
1) Cash Flow to Assets Ratio = Cash flow from operations / Opening assets + Closing assets / 2
2) Price to Cash Flow Ratio = Market price per share / Cash flow per Share
3) Free Cash Flow Ratio = Cash from operations - dividends paid - (

Wednesday, June 1, 2011

Why Do Stock Prices Go Up And Down?

What makes stock prices go up and down? Share prices go "up" and "down" every day because of “supply and demand”. If more people want to buy than sell a stock, this will drive up the share price. Conversely, if more people want to sell than buy a stock, there will be greater supply than demand, and the share price will fall.

Here we will look at the various reasons that cause investors to want

Dividend Per Share (DPS) Calculation

Definition: Dividend Per Share (DPS) ratio relates the dividends announced for the year to the number of shares issued for that year. It is an indication of the cash return that shareholders receive from holding shares in the listed company.

Formula:
Dividend Per Share (DPS) = Dividends paid to equity shareholders  / Number of issued equity shares

Example 1:
Bronze Ltd announced a total of

How to Identify Cheap Hot Stocks to Make You Rich!

If you could identify cheap hot stocks while they are just beginning to warm up, you would have the opportunity to make huge profits and get rich. Following are the most important factors and tips that you need to look at when trying to find cheap hot stocks:

1) Check the company background: Before purchasing a new share, you should check the company's history and financial stability. Look for a