It is easy to invest in the stock market, you only need some documents to open a demat account, but earning through the stock market is a bit tough there are so many things which directly effect to our investment some time election also effects like which party will win or which will lose election market goes up.
If any particular party wins flood also effect on market, but there are 5 things which directly effect to your investment
Today I am going to share those 5 things to know before you invest in any particular invest
3) Free cash
5) Net profit
Business: Before to invest in any particular share first know about its business what business they are doing When you are buying its share at the same time you are not buying a lottery ticket you are buying its partnership. You have to analyze its business is that product working in the market? Is that product in trend or not? If your product is not in trend your investing will go vain. So before you invest you should take care of these things, but it’s also not that a company which is selling biscuits can’t make a huge profit if you are thinking like that you are wrong PARLE-G is the best example for that small product it also can get you profit.
Size: Second thing is company size means capitalization whenever a recession comes there is the direct effect on small companies these companies may be close, but not large companies they also affected but not that much because of its capitalization. Huge capital always saves from the recession, we should look that how big company is if a company’s capitalization is 100 crore, 500 or more than 500 crores that’s the good thing.
Free Cash: Means how much cash is available with the company it is also called net cash. Cash which is left if the company faces huge losses they should have the cash to come out from those difficulties. The Company should have free cash as much as possible to settle so many things it a is a measurement of a company's financial performance there are two types of cash flow
1. Free cash flow
2. Free cash flow to equity
Free cash flow is an important measurement as it shows how efficient a company is at generating cash Investors use free cash flow to measure whether a company might have enough cash, after funding operations and capital expenditures, to pay investors through dividends and share buybacks.
Free cash flow to equity: it means how much cash will be distributed to stockholders as a dividend after all expenses.
Revenue: Revenue is that amount of money that a company actually receives during a specific period we can also call this is the amount which comes from business activities You should also find out about its revenue generation not only revenue, but revenue also should increase day by day also check is company debt free or not, for example, there is a company sales of which is increasing a lot but not its profit a company sales is 100 crore but profit is only 10 lacs it also effect. Company revenue should be increasing day by day revenue is also known as the top line on a company's income statement. Revenue of a company may be subdivided according to the divisions that generate it.
Net Profit: it is the most important point of all may be company increased its revenue may be having cash, but if company not having net profit all things are of no use Means the net profit of a company should be much it is the most important point of all five it is the NET PROFIT which decides how much share will increase and how much dividend will be distributed and the news of dividend increases and decreases price of a share
Above all things are necessary to look before investing because investment is subject to market risk one can make profit in stock market easily if we study the above points and is also ask time to see script and it is not possible for everyone to check these things because everyone is doing job or doing some business, therefore, there are so many stock advisories companies Ways2Capital stock advisory is one of them which analyze stocks and provide tips to traders They have market experts who are having so many years of experience of the stock market you can try them because they spend much time to research in it. They provide SL (Stop Loss) and target also after researching all things and looking market trend.