In order to make a wise investment it is necessary to acquire the capability of reading and analyzing the annual financial report of a company, as doing so can make you assess the true value of the share you are interested to invest in.

Here in the series of articles and blogs we intend to share with our readers some of the basic points that are rather essential in the business of stock exchange. Reading the blogs and articles regularly published on this website would help you to acquire the expertise that is needed to do the business.

By being regular in reading what is published on this website soon you would be capable of understanding the numbers that are mentioned on the balance sheets. Moreover, in order to make your learning more effective we would try adding a quiz at the end of each lesson so that you would yourself be able to assess what you have learn.

Initially we are going to introduce how a stock market works and implying what ways and strategies a small business is turned into large corporation. However, for a better understanding, let us start with some basic financial terms.

Some important terms used in stock exchange

The first point in this regard is the term we refer to as earning per share. As the name suggests, the term is used to show the amount of profit that each shares earns.

Another well used term is IPO, IPO stands for initial public offering and it is used when a company sells the stocks for the first time in the market. A relevant term called ‘going public’ is used when some company is deciding about launching an IPO.

An important phrase used in the stock business is known as ‘market cap’. Market cap is the money that an investor needs to pay in order to buy the required number of stocks. Another relevant term is known as share. Shares, in literal words are known as the piece of something. While we use the term shares it usually refer to the some part of ownership of a business or profit.

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