IFB292: 5 Metrics Every Beginner Investor Should Know

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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