Beginner Q&A on Stock Market

[Master]

What are following points related to shares? How they are useful in picking up/investing in new shares?
P/E Ratio

PE ratio is Price/EPS i.e. the current stock price divided by the EPS.

EPS

EPS is Earnings per share. The total earnings of the company divided by the numbers of shares in equity.
Market cap is price multiplied by the number of equity shares.

Face Value

As above 3 depend on the earnings of the company either directly or indirectly, they vary from quarter to quarter. But, face value is not a variable, unless a split happens. Face value is the nominal price printed on the face of the stock. It does not mean much by itself, nor is it the assured value of the stock as some people mistake it to be.

[Master]

What is Share? - http://in.rediff.com/getahead/2004/nov/25shares.htm

Things to know to buy Shares - http://in.rediff.com/getahead/2005/apr/26share.htm

What is EPS and PE? - http://in.rediff.com/getahead/2005/feb/08stock.htm

Market is bulliesh mean? - http://in.rediff.com/getahead/2004/dec/15expert.htm

Why to buy shares? - http://www.rediff.com/getahead/2004/dec/01shares.htm

When is right time to sell shares? - http://specials.rediff.com/getahead/...v/05stocks.htm

Why the Sensex rises? - http://inhome.rediff.com/getahead/2004/dec/28sensex.htm

What is BSE? - http://www.rediff.com/getahead/2006/sep/13sensex.htm

Should I buy shares now? - http://in.rediff.com/getahead/2004/dec/23sensex.htm

Is Stock worth to buy? - http://in.rediff.com/getahead/2005/mar/14profit.htm

How to pick the right shares? - http://in.rediff.com/getahead/2005/aug/04bull.htm

Source - rediff.com

[Rahul]

Eps stands for “ earning per share”, means profit after tax attributable to a share, For example if share 'X' has profit after tax of Rs.500 crores and total no of shares of 'X' is 10 crore then eps is 50.

PE stands for price earning ratio it is the relation between EPS and market price of share. For example if shares 'X' @ 200 on nse and its eps is 50 as calculated above then its pe is 200/50 = 4.

[Ice]

What is ‘Application Supported by Blocked Amount’(ASBA)?

[Rahul]

What is ‘Application Supported by Blocked Amount’(ASBA)?

Application Supported by Blocked Amount(ASBA) is a facility wherein the money you intend to invest in an NFO stays in your bank account and consequently earns you the interest. The money leaves your account only when units are allocated to you. While in your account, this amount stays blocked ensuring that you cannot use it for any other purpose.