Published: 12th Sep 2024
By: Value Research
We start off with the obvious one. The stock price is simply what a stock costs in rupees. If the stock price appreciates, you have got gains on the stock. If it declines, you are making losses.
It is a chart that is plotted to track the progression of a company’s stock price over time. Usually the chart is plotted over a 52-week period.
Commonly known as ‘market cap’, it tells you how big a company is. Market cap is computed by multiplying a company’s stock price by its number of outstanding shares. For instance, if a company has a stock price of Rs 100 and has one lakh outstanding shares, its market cap will be Rs 100*1,00,000= Rs 1 crore
The volume of a stock indicates the number of trades executed in it over a given period. The higher the volume, the easier it is to enter and exit a stock.
EPS calculates the profits a company has earned for a single share of the company. It is computed by dividing the net profit by the total number of outstanding shares.
The P/E ratio tells you how expensive a company’s stock is. It is calculated by dividing the stock price by the company’s earnings over the last 12 months (also known as TTM or trailing twelve months). The higher the ratio, the more expensive a stock is.
This metric is computed by dividing the stock price by its book value. Though a P/B of less than one may indicate that a stock is cheap, don’t go by the company’s book value alone.
Dividend yield is calculated by dividing the dividend per share by the company’s stock price. The greater the dividend yield, the more money you will earn as dividends.
Our last key metric was popularised by the legendary investor Peter Lynch. To discover this metric, head over to the complete article by clicking on the link below.