Long-term Stock Investing

Value investing is a strategy that involves investing in securities that appear to be trading at a discount relative to their intrinsic value. In this case, investors focus their attention on companies or securities that seem undervalued, considering prevailing market conditions as well as underlying fundamentals. It is common to find potential investments t...

Growth investing is an investment strategy that focuses on growing invested capital. Growth investors invest in companies, industries, and sectors that are in the early stages of growth but with tremendous growth potential. The investment strategy, in this case, is offensive rather than defensive as it entails trying to build a portfolio and generate more re...

Business accounting is a prerequisite for any entrepreneur interested in running a business efficiently. As such, you must understand aspects of the exercise, including balance sheet, current assets, and current liabilities. This article explains these aspects of business accounting in detail. What is business accounting? Business accounting entails monitori...

The balance sheet is one of the most crucial financial statements for a business. Particularly, the balance sheet shows the financial position of a company at a given time. As such, this statement is otherwise referred to as the statement of financial position. This article discusses the balance sheet in detail, with emphasis on the various components of the...

Efficient running of business demands that management understands the financial position of the company. To this end, accountants produce financial statements like balance sheet, cash flow statement, and the profit and loss statement. This article dwells on the profit and loss statement. Ultimately, you will understand the details of the statement as well as...

Every business starts at someplace, and shareholder’s equity plays a crucial role in the founding process. As such, whatever happens to the equity materially affects the running of the business. In this light, this article explains the statement of changes in equity and why it is significant to businesses. What is the statement of changes in equity? Bu...

Companies the world over maintain three primary financial statements for making sense of operations. Among the list of statements is the cash flow statement. This article dives deeper into the details of statement. What is a cash flow statement? During their operations, companies never lift a finger from their financial pulse. The companies face ultimate ext...

Investors watch public companies closer than anything else. Notably, every action that such an organization takes has a huge influence on the direction of its stock. This article discusses corporate action and the important dates associated with the exercise. What is a corporate action? The Business Dictionary defines corporate action as a situation created...

In a broad sense, financial analysis describes the evaluation of the economic trends of a business. Usually, the purpose of this exercise is to analyse the financial health of a company.  What is financial analysis? Once a company opens for business, the management must meet numerous obligations. For example, tax payments, dividends and loan repayments...

The Return On Invested Capital (ROIC) is the earnings that a company gets from the capital it has invested. It is a profitability ratio that measures the returns that investors are receiving back after investing in the company’s capital. In this case, the capital here includes the total amount of long-term debt and the total amount of shares, both ordi...

Debt to income ratio is a personal finance measure that seeks to compare the amount of consumer’s monthly income that goes towards the payment of debts, taxes, and fees or insurance premiums. Lenders rely on this metric to ascertain whether a borrower would be able to repay an amount they wish to borrow. Debt To Net Income Calculation Debt to net incom...

Corporations have many pressing needs, and increasing shareholder value in the short-term is one of them. What happens when revenue growth is not enough to achieve the objective? Oftentimes, the corporations resort to share buybacks. This article explains the share buybacks in detail. Share buybacks, also called stock buybacks or share repurchase happens whe...

In a stock market, all stocks are not same. Therefore, if you want to invest in stocks, you may want to select the right stocks that align with your investment goal. In choosing the best stocks to invest in, investors typically look at some metrics to better understand a stock. Market capitalization is one of those metrics investors commonly used to evaluate...

Price to Earnings (P/E) is a financial metric that measures the attractiveness of a company relative to its current earnings. Also known as price multiple or earnings multiple, the ratio indicates the price that an investor would be paying for $1 of a company’s profit or earnings. Value investors use the metric to determine if stock of a company is tra...

Price to book (P/B) is a financial metric used to compare the value of a company’s net assets relative to the prevailing share price. Market to book ratio is often used to indicate whether a company is fairly valued relative to its net assets or over/ undervalued. The P/B ratio compares a company market capitalization to that of its share price. The me...

Enterprise value to earnings before interest and taxes (EV/EBIT) is a financial metric used to ascertain how a stock or asset is valued relative to the overall industry. In most cases, analysts use the metric to determine if an underlying stock is priced too high or too low, relative to other stocks in the sector. While similar to Price to Earnings P/E, it i...

Return on Equity is a financial metric used to ascertain how effective management is in using underlying assets to create profits and value. Investors rely on the ratio to measure how efficiently management uses the money contributed. Simply put, it is a measure of a company’s profitability relative to stockholders’ equity. Return on Equity Calcu...

Return on Assets (ROA) is the amount of money a company earns or the profit it generates from the assets it has invested. It is basically how a company’s assets are profitable in generating revenue. The total income of a company in a given period is divided by the average total assets in the same period, and the return on assets is determined. The Retu...