Stock Market Fundamentals


This post is for those who have curiosity in the stock Market (which today reached 15K), yet are unable to follow the terms and jargons used.
For our Calculations lets talk about Tata Motors.

Open Price 709.00
High Price 718.00
Low Price 695.65
Close Price 711.20
Number of Trades 20,002.00
Traded Quantity 1,425,392.00
Traded Value 1,014,805,055.65
52 Week High 988.40
52 Week Low 575.00

Based on the demand and supply of the stocks, the traded price fluctuates. The Open Price denotes the price at the start of the day, close at the end of the day. The High and low, as the name suggests are the highest and the lowest prices of the trade that happened during that given period. These 4 points give an idea about the direction of the stock movement and the sentiments on that day.

No of trades signifies how many times did the stock change hands, and Quantity/Volumes denotes the number of shares traded. Typically you would like liquidity. i.e. You should be able to sell/buy whenever you want and whatever quantity you want without influencing the price too much. For you would not like to be in a situation where the stock might be at its highest, but you cannot sell it for there are no takers. As a thumb of rule, a stock which has more than 10,000 average daily trades is liquid. Also a spur/fall in the volumes trend gives us a rough idea about the stability of the prices. Typically when the stock price is stable, the volumes go down, but during an movement (both bear or bull), these volumes will shoot up.

Then there are some Fundamental data:
Market Capitalization ( Rs cr ) 27,384.67
Book Value 177.59
Debt / Equity 0.58
P/E 14.31
Dividend Yield % 2.11
EPS 49.65

Market Capitalization is the Enterprise worth. It is basically the number of issued stocks multiplied by the last traded price of the stock.
Book Value is the book value of he assets (as per the accounting books) divided by the number of stocks.
Debt/ Equity is the measure of leverage used by the company. Higher the ratio, riskier your investments would be.
P/E is Price to Earning Ratio
Dividend Yield: Last Annual Dividend / Price of the stock.
EPS: Earnings Per share. It is the profit which the company divided by the number of shares.

If I have missed anything, please let me know