THE ROLE OF FINANCIAL RATIOS IN EQUITY ANALYSIS: ASSESSING COMPANY PERFORMANCE AND INVESTMENT POTENTIAL AT INDIA INFOLINE

Abstract

Equity analysis is a fundamental process used to evaluate the financial health, performance, and potential of publicly traded companies in order to make informed investment decisions. This study focuses on the techniques and tools involved in analyzing equity shares, including both fundamental analysis and technical analysis approaches. Fundamental analysis involves examining a company's financial statements, ratios, industry position, and macroeconomic indicators to estimate its intrinsic value. Technical analysis, on the other hand, studies past market data, price patterns, and volume trends to predict future movements. The research compares companies across different sectors using key performance indicators such as Earnings Per Share (EPS), Price-to-Earnings (P/E) ratio, Return on Equity (ROE), and market capitalization. It also explores investor behavior, market trends, and the impact of external factors like economic policies and global events on stock prices. The findings suggest that equity analysis is essential for identifying undervalued stocks, managing investment risk, and maximizing returns. The study concludes that a combination of fundamental and technical analysis provides a more holistic view of equity performance, enabling better portfolio management and long-term wealth creation.