CA Bigyan Kumar Mishra

Inflation is one of the most familiar words in economics. It's often used to describe the impact of rising oil or food prices on the economy.  For example, if oil prices go up by $25 per barrel, then input cost of business and transportation costs will increase. In response, the cost of many other products and services will rise. Inflation may plunge countries into a … [Read more...] about Inflation: How It’s Measured and Managed

One of the most essential components of Warren Buffett's investing strategy is what he calls economic moats. It means a company’s competitive advantage that allows it to earn outsized profit for a long term. In this article, we will understand what economic moat is and how it helps a company to have a competitive advantage over its competitors. There are companies that … [Read more...] about Understanding economic moats in stock investing

Revenue is the total amount of income that a company has incurred by selling its goods and services to customers. It's the money that the company has incurred for a period through its ordinary course of business. Revenue is also known as sales for a manufacturing or trading concern and gross receipts for a service industry. You will find companies reporting "revenue from … [Read more...] about Revenue vs. Net Profit: What is the difference

As per law, Demat Account is a must to trade in financial securities through a stock exchange. Demat account is used to hold shares and other financial securities in electronic format. Demat stands for Dematerialised. All financial securities like shares, e-gold, IPOs, government securities, exchange-traded funds, bonds and mutual funds traded in the stock exchanges are kept … [Read more...] about Demat Account: All you need to know

Accounts receivable turnover ratio (ART) is calculated by dividing net sales by the average accounts receivable. It's also known as the debtor's turnover ratio.  Many financial analysts prefer to take credit sales in place of total sales. However, in the income statement, companies do not report credit sales figures, therefore total sales can be considered in absence of … [Read more...] about Understanding Accounts receivable turnover ratios

Inventory turnover is a financial ratio which indicates the resource tied up in inventory, therefore it measures how effectively the company manages its inventory. We have two ways to calculate inventory turnover ratio. One using the cost of goods sold (COGS) and the other using sales in numerator. Few analysts believe that COGS should be used in place of sales as the latter … [Read more...] about Inventory turnover ratio: How to calculate and what it tells you

If you are in stock market for a while, and closely following financial news sites, then you might have come across list of stocks listed on these websites with following types of heading; Have you ever wondered why these financial sites give you this type of information? Well, now you will know why. In this article, we will explain what is long and short build-up, and … [Read more...] about Long & Short build-up, Long Unwinding and short covering – Explained

Accounts payable turnover ratio is a measure to quantify the rate at which a company pays off its suppliers and short term debts.  Accounts payable is listed on the balance sheet as a liability. It's a short term debt that the company owes to its creditors. Here is the formula to calculate accounts payable turnover ratio; Accounts payable turnover = Purchases / average … [Read more...] about Accounts Payable turnover ratio: Calculation and what it tells you

We have many financial ratios to assess a company's efficiency in managing assets, liabilities and revenues in order to make profit. Working capital turnover ratio is one of such financial ratios. Working capital turnover ratio is calculated by using the following formula; Working capital turnover ratio = Net Annual Turnover or sales / average working capital Net … [Read more...] about Working capital turnover ratio: How to calculate and what it tells you

Company’s ability to generate positive cash flow is more important than profitability, because cash is needed to pay suppliers, employees and to take care of other expenses to continue as a going concern. A company that generates positive cash flow from its operating activities is at a better position than a company without positive cash flow. The company with positive cash … [Read more...] about Why cash flow is more important than a company’s net profit