Thursday, December 21, 2006
Using the Altman Z-Score to Check the Financial Quality of your Stocks
Edward Altman invented the Altman Z-Score in the 1960's to determine the statistical probability of a company going bankrupt. The Creditguru.com has a nice interactive Z-score calculator that allows you to type in eight variables to determine the likelihood of failure. According to the site, a score under 1.3 means "Probability of Financial embarrassment is very high." I tried it for Ford Motor Co. (stock symbol F on the NYSE) and came up with a score of .38.
Subscribe to:
Post Comments (Atom)
7 comments:
know A B C of Stock market and gt more gain through Stock market.
visit at
http://successinstockmarket.blogspot.com/
We Provide Recommendations on Indian Shares & Commodities via SMS. We provide recommendations on all NSE BSE Shares with Short Term view based on Technical Analysis.
The Website also provides information on Local & Interantaional News, Celebrity & Celeb News, Glamour World & Entertainment, Gossip Cafe, Believe it Or Not & Much more.....
Visit www.shareinfoline.com
ShareInfoline.com is the leading website in India providing recommendations on Indian Shares, Stocks & Commodities.
It Provides all its calls by way of SMS and gives more than 80% accurcay in results.
You can also check the Past Performance in our website www.shareinfoline.com
We all get bombarded every day with mails, morning briefs as to which stock we should pick and how will be the market trend today. Every time the brokerage houses will send the stock market tips as if we all are playing a gamble and need the tricks as to how we can win it. And anticipating as to how to do stop loss and at least will make smaller profits. What most of the investor do is they consider short term trading as the long term investment and believe as to how it can be doubled in a day. Buying a stock just because the price is low and some stock market tip you received that this will boom in the market today. What most of us do is that we all trade with money which we can’t afford to lose but the market always says that invest only that money which is in excess to you. All of these are the big mistakes which we commit every day in spite of being reminded every time that we should complete our home work for the next day.
Things to Remember when invest in stock market:
We believe that the fundamental says invest in those company about which you know completely , but that doesn’t mean you fall in love with a company and a particular stock just because you are familiar with it or it create news in the stock market every time. Most of us just try proving our fundamentals are right and for that we apply too many technical indicators on that stock. It’s not true that the stock will go according to its fundamentals and technical, many stocks behave opposite to their indicators, thus they do not guarantee as to whether it will go up or down.
Investors jump to penny stocks as they immediately boom in the market due to rumors what need to understand is that the Penny stocks are very risky , and on this basis make your strategy as to which one to pick from that lot and how much to invest . The portfolio of the investor should be constructed in such a manner that it allots weight age to different sector and the sizes of the stocks so that the diversification is there and the risk can be mitigated. Therefore the weight age of penny stocks in one‘s portfolio should not be more that the 15%. This is to minimize the losses and to accumulate the profits also.
Keep a watch on the industry of the particular stock. Most of the stock behaves according to their industry trend. Thus if in the budget the government committed to play large role in the infrastructure sector , all the stocks will go react as per the budget and the whole sector recorded the jump of 12% on the next day. But it might be the case that the industry is booming and the stock is going down, therefore along with Industry, Company information is also vital.
Past performance of any company doesn’t not hold true or affect its future performance. Many of the Indian stocks which were heavy weight in the past few years and were considered the blue chip companies in this market are either bankrupt or have become extinct in the market. Thus continuous performance analysis and evaluation is important.
STOCK MARKET TIPS || TIPS FOR STOCK MARKET || STOCK MARKET IDEAS
Thanks for sharing such juicy information. Hope you will publish more information like this.
________________
penny stocks
First of all thanks for trading. Make this work continue and improve day by day.
Well nice post.Keep posting more.
Post a Comment