AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 54 : 22.08.2020

-


 Financial Ratios

Profitability Ratios Part -1

 EBITDA Margin (Operating Margin):

Earnings before Interest Tax Depreciation and Amortization (EBITDA) Margin is measurement of a company's earnings before interest, taxes, depreciation and amortization as a percentage of its net sales.

 EBITDA Margin = EBITDA / Net Sales

 This important financial ratio tells us about the company's profitability (in percentage terms) at the operating level. Hence it is also known as Operating Margin. It tells us about the efficiency of the management and operational efficiency of the company. EBITDA Margin can be useful for comparing different companies from the same sector having different capital investment, debt and tax profiles.

 PAT Margin:

Profit After Tax (PAT) Margin is measurement of a company's net profit as a percentage of its net sales.

 PAT Margin = PAT / Net Sales

EBITDA Margin is calculated at the operating level where we consider only operating expenses while PAT margin is calculated at the final profitability level taking into account all other expenses including interest cost, depreciation and tax expenses. PAT Margin is also very important and is case of many companies you will see that EBITDA

Margin is good enough ranging around 15 - 25 % but their PAT Margin is very low around 5 - 6 % only. This may be because of high interest cost burden or huge depreciation expense due to working in an asset intensive business.

 

FOR MORE SUCH TYPE OF EDUCATION JOINT OUR ONLINE SERIES AND BATCHES AND BE A PRO TRADER CONTACT ON 7028 421 786.

Comments

Post a Comment

Popular posts from this blog

AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 61 : 10.10.2020

-
Image
                           Financial Ratios- Liquidity Ratio As the name indicates, these financial ratios help us to evaluate the ability of the management to use its assets and manage its liabilities effectively. Commonly used Management Efficiency Ratios include –   1. Fixed Asset Turnover Ratio 2. Working Capital Turnover Ratio 3. Total Asset Turnover Ratio 4. Inventory Turnover Ratio 5. Inventory Number of Days 6. Receivables Turnover Ratio 7. Days of Sales Outstanding   Fixed Asset Turnover Ratio: The fixed-asset turnover ratio is the ratio of net sales to the fixed assets of the company. Fixed Asset Turnover Ratio = Net Sales / Average Net Fixed Assets This ratio is used to measure the operating performance of the company, i.e., how efficiently a company is producing sales with its machines and equipment. In general, a higher fixed-asset turnover ratio indicates that a company has more effectively utilized investment in fixed assets to generate revenue.A de
Read more
-
Image
16.06.2019 AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 12 : Stochastic Indicator Stochastic is known as one of the reliable leading indicator to forecast the Price Reversal or Swing Reversal, its also give an idea about stock over bought position as well as stock over sold position Stochastic Indicator does not follow price or volume but it follow momentum of the trend For ready reference, Formula of the Stochastic Indicator as below : % K = (Most Recent Closing Price - Lowest Low) / (Highest High - Lowest Low) × 100 %D = 3-day SMA of %K Lowest Low = lowest low of the specified time period Highest High = highest high of the specified time period There is a two line are available in stochastic indicator, %K Line known as fast line and %D is known as slow line %D is known as a slow line because its a SMA of %K Default setting is 14 period it means it consider recent last 14 persod data as per formula in calculation We can use this Stocha
Read more

AAKASHAYA PATRA EXCLUSIVE STOCK FOR INVESTMENT: 21.06.2020

-
Image
DOLLAR INDUSTRIES LTD CMP 137 ENTRY 135 TO 130 STOPLOSS 100 TARGET 300++ TIME: 36 MONTHS Dollar Industries Limited has become one of the leading brands in the hosiery sector with an enviable 15% market share and a significant percentage in textile exports of the total production in the Indian hosiery market. It has also made a noticeable presence across social media and e-commerce platforms. Dollar has extensively penetrated across 29 states in India. Not only that, its products have also gone beyond the boundaries of the country and has emerged as the highest selling Indian innerwear brand in the UAE and the Middle East, marking its presence in places like Oman, Basra, Jordan, Qatar, Kuwait, Bahrain, Yemen, Iraq, Myanmar, Nepal, Nigeria and U.A.E. Having fused its position in Gulf countries the company is now assertively looking at the rest of the world with collections that promise to delineate the string. Dollar Industries is the only hosiery and knitwear company in India c
Read more