8. Financial ratio analysis

To recap, in the previous videos, we discussed the three important financial statements: balance sheet, cash flow statement, and P&L statement. In this video, we discuss financial ratios and what they convey. Simply put, financial ratios will help you understand the financial health of a company. There are three broad categories of financial ratios: Profitability ratios, leverage ratios, and valuation ratios.
We break down each category and ratio and understand how you can use them to get a sense of the fundamentals of a company.
0:00 Financial ratios
0:27 Categories of financial ratios
1:40 Profitability ratios
4:50 Leverage ratios
6:36 Valuation ratios
9:16 What is book value?
Learn more about financial ratios here: zerodha.com/varsity/chapter/f...
zerodha.com/varsity/chapter/f...
zerodha.com/varsity/chapter/f...
If you have any questions about financial ratios, do post them at the end of the chapter.

[@jatinkhandelwal1600]

salute to the one who edited the video...

[@mohanarjun794]

Highly recommend one stop for all solutions to understand fundamental analysis
Thank you Mr rangappa sir

[@cyrilmths]

I am learning a lot from you about the concept of valuation of a company. Please keep on adding more videos.

[@rajbhagat3995]

Today I learned something very valuable. I did the Zerodha Varsity course it is awesome and simple.

[@sabaparween771]

Thankyou so much it is easier to understand the concept just under a sec

[@dipakchasiya4612]

Amazing body language, voice, eyes contact and etc.💓

[@cliffordrodrigues9159]

Nice , Thank you.

[@akshaychallani2542]

U guys rock...

[@_Bishma_]

Thank u Sir 🎉🎉

[@kaifinaseemsiddiqui9828]

Good one

[@pm6871]

Why have you taken Total Income/Expenses in place of Operating Income/Expenses? You have mentioned on your website: EBITDA= Operating Income-Operating Expenses, where Operating Income=Total Income-Other Income and Operating Expenses=Total Expenses-Finance Cost-Depreciation/Amortization.

[@kasimkhan-mm3zr]

Yes

[@stock_insideout]

EBITDA stands for Earnings before Interest Tax Depreciation and Amortization. then how you can take finance cost (interest) and depreciation to calculate operating margin. interest & depreciation does not include in company's operating expense. company's total income - total operating expenses = EBITDA. EBITDA - Depreciation = EBIT (Earnings before Interest & Tax). EBIT - interest = EBT.

[@swaroopsri21]

Thank you so much team Zerodha and Karthik sir was such wonderful content related to stock market. I will always be grateful to the entire team for helping me learn all this with ease. Much love. :)

[@vikasmehta307]

Please complete the full fundamental analysis of stocks ..this is half analysis of stock

[@49umairkhan25]

In profitability u said in denominator to take revenue from operations and took total income

[@Honeywilliams-dw4xv]

Nice

[@PraveenKumarPku]

@ 9:29 Do you think the outstanding is correct ? Its only 28 crores instead of 289 crores ? Please clarify

[@user-ml7uy2zk2h]

One doubt in book value----
We will consider only share capital and reserves ,
What about the land and machineries and others,

[@mohitkaushik5476]

how did you get how many shares are there in the market of bajaj auto ?

[@shahnawazkharadi1376]

MCAP/CMP

[@user-qq8ig5tj2i]

EBIT and EBITDA are not the same thing...the first ratio that you calculated was EBIT or operating profit margin....when you add back D&A to EBIT that is when you get EBITDA

[@RiturajSinha123]

12:18 Total outstanding shares, how to calculate

[@drsmitachourasia7803]

What does negative P/E ratio signify

[@ThangaThalapathy75]

It means you fárted !

[@JK_PRIVATE01]

It means the company is making loss 📉

[@the_terrific_m]

Varsity link isn't accessbie from Pakistan. That's very cruel

[@aloveoftraveller4391]

How to know total outstanding of shares

[@balajis225]

That u can check in the fundamentals in ur trading application in number of shareholders

[@aryavijayan0603]

You can check it from NSE or BSE website

[@BlackEn]

Dude thats not ebitda, and operating profit is ebit not ebitda

[@AmanGupta-nb2id]

pat is 5211 u took 5221

[@varsitybyzerodha]

Hi Aman, noted.

[@PHALANGE1931]

Caligulate 😂😂Caligula