Finance

Essentially we have two important type of orders in order to buy and sell stocks, the first one is "Market Orders" and the second one is "Limit order". Market order gives you whatever price is available in the stock exchange for a stock at the time of execution. If you place a request to buy 100 shares of XYZ limited without specifying a price, then the system will … [Read more...] about What is market order and how its used to buy and sell stocks

While buying or selling stocks from the secondary market, you have the option to place different trading order types to get the best price. Limit order used in the stock market to control the buying and selling price of stocks. In this article, we will be discussing what is limit order and how to use limit orders while buying and selling stocks. What is a limit … [Read more...] about How limit order used when buying and selling stocks

Whenever a person spends money to buy a security with the expectation of making a profit, he is either investing or speculating. The main difference between investment and speculation is the level of risk that the person undertakes as they attempt to make a profit from transactions they make in the market. Before getting into the difference between investment and speculation, … [Read more...] about Investment Vs Speculation – Differences you must know

Blue chip stock refers to the stock of a well established company which is large and financially sound. The main reason for investing in these stocks is that these companies have already survived challenges, adverse economic conditions and market cycle in their business. Therefore, investing in these companies is considered as safe. Here are certain characteristics of a blue … [Read more...] about What is blue chip stock and how it can benefit an investor

Common stock is a security that represents ownership in a company. The owners of common stock are known as common shareholders or equity stockholders. One share out of the total common stock represents fractional ownership based on the total number of outstanding shares. For example, if a company has 10,000 shares of common stock outstanding for a year and you bought 1,000 … [Read more...] about What is common stock and how to find it on the balance sheet?

There are a number of ways to make money in the stock market. To make money, certain type of investors are attracted to companies that are expected to grow faster in comparison to others by reinvesting most or all of its earnings in themselves. These type of investment strategy is known as growth investing. These investors do not invest to get dividends. Growth investing is … [Read more...] about What is the difference between Growth and Value investing

Financial distress is a situation in which an organization will be unable to repay its financial obligations due to high cost, lack of liquid assets or economic downturn. In this article, we will discuss how bad capital structure can create financial distress for a company or organization. Economists have put 4M as the most essential resources of a successful business; men, … [Read more...] about How bad capital structure can create financial distress

In our last articles, we have discussed what is payout ratio, DPS and stock repurchase. In this article,  we will be discussing the difference between cash dividend and share buyback, which one is better for investors. A company with surplus cash has following three options to reward shareholders: Pay cash dividends to shareholders,Share repurchase or buyback.Invest … [Read more...] about Cash dividend or share buyback – which is better for investors

Growth investing is an investment strategy where investors typically invest in growth stocks seeking capital appreciation over the long term. Therefore, to understand what is growth investing, we first have to understand what is a growth stock. What is growth stock Growth stocks are shares of those companies which uses most or all of their earnings and resources to expand … [Read more...] about What is growth investing and why investors use it to select stocks

Debt service coverage ratio is calculated to measure availability of profits with the company to pay back its current debt obligations. In short its referred to as DSCR. The ratio reflects the company's ability to service debt obligations for a given period of time. DSCR or debt service coverage ratio can also be used to analyze availability of cash inflow to repay current … [Read more...] about How to calculate debt service coverage ratio – DSCR