Episode 9

Introducing Edge model for effective Stock Investing !!

About this episode

In this 9th session, Mr Vivek Bajaj introduces the edge model, a framework to help investors rate a company. He will cover the different types of ratios importance of valuing a company. Watch the whole video to determine the financial health of a company which can be done by analyzing the ratios.

Mainly six types of financial ratios have been discussed in this video. They are:

  1. Return.
  2. Efficiency.
  3. Growth.
  4. Solvency.
  5. Cash Flow.
  6. Valuation.

What are Growth Ratios?

These ratios measure the rate of growth of the company & help us identify the pace at which it is growing. These include:

  1. Net Sales Growth.
  2. EBITDA Growth.
  3. Net Profit Growth.
  4. EPS Growth.

EV/EBITDA Technique

The enterprise value to EBITDA technique equals a company’s EV divided by earnings before interest, tax, depreciation & amortization. An under-valued company will have a low enterprise, whereas a high-enterprise multiple will reflect an overvalued company.

Also, by using the StockEdge application, Mr Bajaj has shown how to locate EV/Revenue, EV/EBITDA & P/E values in this video.

About Mr. Vivek Bajaj

The passion for data, analytics and technology is what makes Vivek Bajaj a financial market survivor. The journey as a market participant started in 2002 when the first trade was executed in the options contract of ITC. Life was simpler and easier during that time. Since then technology and Big data have taken over totally. As an early adapter to the complex tools, Kredent was formed to capitalise on the opportunities. He is co-founder of StockEdge and is committed to bring simplicity in the complex world of market data. He is a Chartered Accountant, Company Secretary and an MBA from IIM Indore. He is a part of various committees of exchanges and regulator and he has been an active contributor in the evolution of Indian Derivatives Market.