fundamental stock analysis

1 . P/E ratio=price earning ratio=current market price / earning per share
suppose current market price os a share is 100,earning per share in last
quater is 10. P/E = 100/10=10
P/E ratio is >25 indicates that market price of a share is so high.
P/E< 5 indiactes that company have some -ve issue .
good P/E ratio is 7-15.
*If TTM EPS is batter than full year EPS that is good.
2 . M/B ratio = closing price of a share / book value of this share.
The real asset value of a share is known as book value.
If m/b ratio of a share is >10 ya >3 that's bad
good M/B ratio is 4-7
3 . B /F ratio = book value of a share/current face value.
If B / F <5 is bad.
More B/F ratio is good
4 . Operating profit
OPM% = (Operating profit/sales)*100
More opm% is good.But if OPM% is less then 10 that's so bad.
5 . RONW% ( Return on net worth)
RONW% is<10 is so bad for a stock
Good RONW% is >10.
6. Beta value = the momentum of a share / momentum of total market
Beta value is less than .7 ya greater than 1.7 is so bad.

7 . Advance ,, the closing price of a share on tomorrow is greater than tomorrow -1 day
that is advance

8 . Closing price of a share of tomorrow is less than tomorrow -1 day that is decline.

if advance decline ratio is greater than 1.5 for 5 days than market price will go up.
but advanc decline ratio is less than .7 for 5 days then market price will go down.

SHARE MARKET

to invest in the share market you need to have a trading and demat account with a registered broker.for the same you need to have the following1) 2 passport size photo's2) bank account3) proof of address i.e. passport/ voters id/ bank account statement / telephone bill stating your address4) proof of identity i.e. passport/ voters id/ ration card5) a cancelled cheque leaf6) PAN Card mandatory from april or may 2006once you give all these documents in a couple of weeks time you will get your trading id as well as demat a/c number based on which you can start investing.
you need to visit a broker available nearest to you. you should search for offices like xyz securites, xyz equites, xyz investments. etc or whatever available in your country. but before you invest in share markets you must have indepth knowlege of the markets riskiness and growth directions, or you should ask a good analyst to help you else you can loose a good amount of money.