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  Mutual funds have opened new opportunities to investors and imparted much-needed liquidity  to the system. In this process, they have challenged the hitherto dominant role of commercial banks  in the financial market and national economy. It is one of the best platforms for small investors to invest their money. Table of content What is Mutual Fund? How to establish a Mutual Fund? Types of Mutual Funds Net Asset Value (NAV) of a Mutual Fund Scheme What is Mutual Fund? Mutual funds are trusts that pool together resources from small investors to invest in capital Market  instruments like Shares , debenture, bonds, treasury bills, commercial paper, etc. The role of mutual funds in the financial market is to provide access to the stock market-related investments to: people with less money in their pocket people with less knowledge people with less time mutual funds also help investors with the step-by-step monthly savings of smaller amounts. How to establish a Mutual...

Key Factors and Indicators to be considered before making Investment in Capital Market: Investors have a different mindset when they decide about investing in a particular avenue. Every individual wants his saving to be invested in the most secure and liquid way. However, the decision varies for every individual depending upon their risk aptitude. Investors shall look at the Fundamental  part of the company and bifurcate them into quantitative and qualitative  aspects before making an investment in the companies listed in the capital market. By the end of the blog, you will be able to know the basic terminology used in the capital market. Share : Total capital of the company is divided into units of small denomination. one of the units into which the capital of the company is divided is called a  Share . for example, in one company the total capital of Rs 7,00,000 is divided into 7,000 units of Rs 100 each then each unit of Rs 100 is called a  Share . Capital:  ...

  Profitability Ratio for shareholders: Return On Equity, Return On Capital Employed, Return On Assets, Operating profit, Gross Profit, and Net profit. Interpretations and analysis of profitability ratios. Dupont Analysis of Return On Equity and Return On Capital Employed. so, to calculate the return on equity using the Dupont model, simply multiply the three components that are net profit margin, asset turnover, and equity multiplier.  Table of content   Return On Equity(ROE)  Return On Capital Employed(ROCE)  Return On Assets (ROA) Gross Profit Ratio Operating  profit Ratio Net Profit Ratio conclusion 1) Return On Equity(ROE) This ratio calculates return on equity shareholder's fund only. It excludes preference shareholder's  funds. A  high return  on equity shows better productivity or efficiency in the utilization of the owner's funds. Return on equity is also called return on net worth. let us understand it by one example. suppose Coca-...

Leverage Ratios: It focuses on long-term funds used by the businesses business. Its main objective is to measure the long-term solvency of a firm. Capital Structure Ratios: It focuses on Equity funds, debt capital and, preference capital. Its main objective is to find the portion of risky long-term funds. Coverage Ratios: Its main objective is to find whether the firm's earnings are sufficient to cover different charges like interest for debenture holders and dividends for shareholders. Table Of  Content Capital Structure Ratios Coverage Ratio Conclusion A. Capital Structure Ratios 1) Equity Ratio This ratio indicates the proportion of owners' funds to the total funds invested in the business. It is also called the propriety ratio. Shareholder's equity  = share capital ( both equity and preference ) + Reserve and surplus - Accumulated losses OR, Shareholder's equity = Total assets - current liabilities - long-term debt. If the majority of the fund of the business is...

What is Liquidity? In simple words, Liquidity is cash and cash equivalent. Here cash and cash equivalent denote marketable securities like shares which can be easily converted into cash. If somebody says there is a liquidity crisis in the bank it represents a shortage of cash in the bank. similarly, If somebody says there is excess liquidity in the bank it represents excess cash in the bank.  The objectives of Liquidity Ratios are to measures the short-term solvency of a firm. Liquidity ratios focus on current assets and current liabilities. 

Ratio Analysis: How to pick up a share of a company using financial ratios. How to take buy, sell and hold decisions. Know the major objectives of various ratios like Liquidity ratios, performance ratios, and profitability ratios. Ratio analysis enables the users of financial statements to make prompt decisions. Table of Content Meaning and objectives of Ratio Analysis 11 Important Financial Ratio Conclusion Meaning and objectives of Ratio Analysis Ratio analysis refers to the study of the relationship between various variables of a financial statement for the purpose of decision making. Ratio analysis is used by shareholders because it shows the financial position of the company and how the company is utilizing its capital and assets to generate revenue. The major objective of the liquidity ratios is to measure the short-term solvency of the firm. performance ratios measure the efficiency of asset and profitability ratios measures the profit margin and earnings.    11 Importa...

 In this blog you let's learn about the technique of fundamental analysis. Table of contents Introduction Economic Analysis Industry Analysis Company Analysis Conclusion  Introduction Fundamental analysis is one of the most important tools used by long-term investors. Every company has its own real value (intrinsic value). If the market price of the share of the company is greater than intrinsic value then the stock is said to be overvalued . In such a situation, if you have shares of any company then it's time to sell the shares . If the market price of the share of the company is less than intrinsic value then the stock is said to be undervalued . It's time to buy the share  of such a company as per your capacity. similarly, if the market price of the share of the company is equal to the intrinsic value then the stock is said to be correctly valued . It's time to hold the shares . In the short term though the market will fluctuate due to fear and greed of the shareh...