Author: Compounding Wealth Through Sensible Investing

Rationalising The Use of Financial Ratios and Indicators

I remember when I started serious investing about 2 years ago, it was an absolutely daunting task to dissect the financial reports and sieve out relevant financial indicators and ratios to help me in my analysis, as there were simply too many financial ratios out there! Lets do a quick gauge: PE, PB, PEG, P/NTA, ROA, ROE, Current Ratio, Quick Ratio, Debt/Equity, Debt/Assets, Dividend Payout Ratio, Price/Sales, Assets Turnover, Gross Margin, Operating Margin, Net Margin, EBITDA Margin, Dividend Yield, Free Cash Flow Yield, Cash Conversion Cycle, Inventory Turnover, Receivables Turnover etc. Which one do I use? Which one is...

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Do not be blinded by financial news and commentaries

I was watching Channel News Asia during an evening that was showing business news. There was this financial commentator painting a bleak outlook on the Indian Rupee fall, backed with much economical and trade data. And when the host asked her directly on just how low the Rupee will go, she was stunned for a second, attemped to regurgitate the figures and data, and beat around the bush for the next 20 seconds. Coincidentally my aunt was sharing with me her re-consideration on whether to invest, after listening to all the rather gloomy forecast by the market analysts. We...

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