Episode Details

Welcome to Investing for Beginners podcast! In today's episode, we will talk about the five financial ratios every investor, beginner or not, should know! There's a multitude of ratios out there and each has their own purpose but we believe that these five are the most important and should be in every investor's arsenal in valuing a business so listen on!

Timestamps of the episode:

-The most popular metric of them all: The price to earnings ratio (P/E) [02:00]

-The limitations of using the p/e ratio and the justification it gets depending on each industries it belongs. [04:33]

-Defining the price to free cash flow ratio (P/CF) and why it is a more superior ratio than P/E. [09:27]

-How to calculate the p/e and p/cf ratios into earnings yield. [14:52]

-Now into the efficiency ratios: Return on Equity (ROE) and Return on Invested Capital (ROIC) [15:45]

-Why always looking in a longer timeframe helps visualize the impact of ratios in a business. [21:38]

-Balance sheet ratio: Debt to equity (D/E) [24:40]

-The importance of knowing the context behind the d/e numbers and how it differs across each industry average. [27:04]

-What is an interest coverage ratio and what it tells you. [31:15]

Note: Timestamps may differ and are approximate, depending on your podcast player.

For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com 

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