'Tame Inflation, Avoid Recession' could possibly turn out to be one of the key themes for global financial markets in 2022. Fear of slowing growth has put enormous pressure on the markets. Brutal volatility continues to influence capital markets, which are exasperated by the threat that contractionary monetary policy by major central banks will position the global economy in the throes of a recession. Bears steadily continue to gain a stronger grip on Indian equity markets, majorly driven by concerns about the hurtful implications of a tighter monetary policy on the growth momentum, record inflation levels, mixed Q4 earnings season and weak global cues.
Stock picking is an uphill task. Especially in the current environment, where investors must be wary of businesses that are vulnerable to high levels of long-lasting inflation, supply chain disruptions, rising interest rates and incessant geopolitical crisis. A smart strategy for investors is to consider companies with robust earnings' potential that hold up better than others when the times get tough. These are companies that generate plentiful profits on a regular basis. A neat trick to identify such businesses is to scrutinize net profits or bottom line. To gauge the extent of profits, net profit margin is the ideal metric.
Net profit margin is one of the key tools for determining the financial health of a company. Net profit margin ratio is calculated by dividing net profit by sales revenue. The metric demonstrates a company's ability to convert sales into profits and also furnishes an insight into how well a company is run. Higher the net profit margin, the better is the financial health of a company as it implies larger profits relative to revenue. Net profit margin also, to a certain extent, determines a company's ability to pay dividends to its shareholders.
Pros and Cons of Profit Margin Ratio
Denne historien er fra May 23, 2022-utgaven av Dalal Street Investment Journal.
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Denne historien er fra May 23, 2022-utgaven av Dalal Street Investment Journal.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
