How Investment Is An Essential Element For Growth Of The Country And Economy

The earnings per share of the common stock is a financial metric for a business' net income believed to be available to reward the common stock shareholders. The ratio is usually calculated by dividing the difference between the net after-tax profits and dividends attributed to preferred shareholders with the average number of outstanding common shares. Significantly higher earnings per share imply that the business is capable of paying reasonable dividends to the common shareholders while a low ratio indicates a reduced ability for the entity to declare and pay reasonable dividends to its common shareholders. From the comparison, Nike has a higher EPS ratio at 1.05 compared to 0.98 for Under Armour. This implies that Nike is performing better than Under Armour and that Nike could be either making increasing earnings or repurchasing its stocks while Under Armour is performing dismally. This low ratio for Under Armour is an

The next factor that has a significant impact on a shares price would be the perceived value of a company. This can be looked at in a couple different ways, with the first being the actual monetary value produced by a company. A company’s value can be determined by taking their outstanding shares and multiplying this number by the price the share is trading at. This is referred to as their market capitalization and has great effect on what a stock

The diagram illustrates the studies by Beaver, Clarke and Wright (1979) and Foster, Olsen and Shevlin (1984). The studies are based on the Ball & Brown study regarding the relationship between earnings and share prices. This diagram shows that the size and sign of unexpected Earnings per Share (EPS) is related to the sign and size of cumulative Abnormal Return (AR).

Economic growth is a necessary but not sufficient condition of economic development. There is no single definition that encompasses all the aspects of economic development. The most comprehensive definition perhaps of economic development is the one given by Todaro: ‘Development is not purely an economic phenomenon but rather a multi – dimensional process involving reorganization and re orientation of the entire economic and social system. Development is a process of improving the quality of all human lives with three equally important aspects. These are: 1.

This is the first factor that affects share prices. When you get to see that more people are buying stocks, then there is an increase in the price of that particular stock. On the other hand price of stock falls when more people are selling their stocks. So it is very difficult to predict the Indian stock market. This is the main reason why you need to get in touch with a good stock market consultant. There is consultancy for you which can help you a lot on choosing the right stocks for you.

Economic growth refers to the rate of increase in the total production of goods and services within an economy. Economic growth increases the productivity capacity of an economy, thereby allowing more wants to be satisfied. A growing economy increases employment opportunities, stimulates business enterprise and innovation. A sustained economic growth is fundamental to any nation wishing to raise its standard of living and provide a greater well being for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced over a year. It is the total value of production within the economy. The total value of production is the total value of the final goods or services less the cost of

Contrary to this belief, earnings management can benefit the market. This can be viewed from the aspect of stock market. According to the research conducted by Aleš Čornanič and Jiří Novák, through earnings management, the stock price of a company can be stabilized. This makes a business with a high potential for growth more attractive to investors. Resources are therefore allocated to more efficient companies listed on the stock exchange and as a result the UK economy benefits as a whole. Walker (2013) says that firms benefit from a stable stock price and argues that earnings management is not always bad, but accepts that it must be made more transparent as well as increasing investors’ understanding of it.

Inward foreign investment is believed to boost the economic growth of host countries directly through employment creation and capital formation, and indirectly through knowledge, technology, and information spillovers. Multinationals have superior technologies, technical know-how, and managerial and marketing experiences than domestic firms. Similarly, exporting firms, domestic or foreign, have advantages over non-exporting firms regarding access to advanced technologies that are more productive and efficient. However, multinationals and exporters may not fully internalize the benefits of these assets. The benefits may spillover to domestic and non-exporting firms through market interactions, competition, and public nature of the assets.

Comparing the INR to the USD shows that there is a relationship between equity markets and currency exchange rates in emerging markets. When the INR depreciates, investors pull out of India and India stocks fall. Despite the continuous growth in India the Indian economy is still facing a lot of challenges, which make it difficult for investors to invest. As the Indian market decreases the USD usually increases because of its sound and stable economy as compared to other emerging markets. The investors help create a tremendous swing in India’s shares as they buy in the INR for short term gains and sell at the first sign on trouble.

An equity is, basically, a part of the stock of a company, which external investors buy becoming shareholders of the company and receiving annual dividends, if the company at the end of the fiscal year has reached a sufficient amount of profit.

Over the years, there has been much debate over whether the state plays a role in the economic growth and development of a country. Some believe that the state is essential, arguing that its intervention promotes investment, mobilizes industry and capital, and creates jobs. Some view it as an obstacle, claiming that its role should be deregulated and reduced because its involvement can lead to market distortions and corruption. Some do not like either argument, declaring that the state is less important compared to other factors in determining the development trajectory of a country. These factors include geography, ethnic diversity, conflict, and political institution. I believe that the last position is the strongest; while the state does play an important role in growth, it is not the most important. I believe that the political institution a country operates under is more significant to dissecting this relationship than the intervention of the state.

In 20th century, the financial investment is an unfamiliar industry to every family. People usually save their money in the bank, some of them even keep their money at home. However there are some special outstanding people has already know the importance of the financial investment and right now they become one of the richest man in the world. Such as Warren Edward Buffett. Because of the influence of these people. More and more people start to know and learn how to get profit from financial investment. Nevertheless not everyone has a father who is financial manager and have a chance to study in the university. Therefore most of people prefer find a financial adviser who can help them and using their money to invest on different financial products. So that the financial adviser became a very popular job. They help investor to find the suitable financial products and get salary from them. But there were some unethical financial investment companies use ignorant of the investor to earn more profit. One of the simplest yet most effective investment scams is the ponzi scheme which happend. The promoter promises investors a very high return on investment and says it is secure, but there is no real 'investment '. These investment scams make financial investment industry to lost the trust from their investors. (https://www.moneysmart.gov.au/scams/investment-scams) For this reason the financial investment industry and the world countries governments right now are not only

Canibao, Garcia-Ayuso and Rueda (1999) examined accounting data taken from Spanish companies, showing that the joint explanatory power of earnings and book values has not declined in the latest decades. However, their results demonstrated a slight decline in the marginal explanatory power of book values in relation to earnings. The usefulness of accounting data in business evaluation was, also, evidenced by Ou and Penman (1989), Ohlson (1989, 1995) and Penman (1996). They explained a company 's internal value by using accounting parameters and concluded that they can be used to identify stocks that have not been properly evaluated. Τhey, also, expressed the view that the book value and earnings form the primary accounting variables which are used to interpret stock prices. Their findings are, also, supported by the empirical studies conducted by Lev (1996) and Francis and Schipper (1996), who examined data from the US market during the latest decades. They have, also, found that the explanatory power of accounting variables has declined. On the other hand, Collins, Maydew and Weiss (1997) have expressed the opinion that the combined relevance of earnings and book values is progressively increasing over time. On the contrary, the relevance of extraordinary

Global investors are regularly investing in Indian equity markets because of the business friendly approach of our Prime Minister Mr. Narendra Modi. Also global news like the policy changes, release of the various data in U.S. economy affects the Indian markets. To have a clearer idea, let us trace the some of the biggest rise and fall in Indian markets. In July 1990, Sensex touched the magical no. of 1000 for the first time in the wake of good monsoon and extraordinary industry performance. Few years later in June 2005 it ended up at 7000 points, after the news of settlement between Ambani brothers which boosted the sentiments of investors and then the huge crash of markets happened in 2008 when it reached to the level of 8500 points from 21000 points. The point here is that instead of investing in the books of the company we invest on the basis of speculation. Not only our retail investors but also the big institutional investors are afraid of booking losses, they want to earn as much as they can and as early as possible- this is where the root cause of the problem lies. If an informed investor would have looked at the books of Kingfisher in 2005, he could have easily figured out that the company will not sustain for long – the huge debt burden and the inappropriate business model will definitely drown the company sooner or later.

Barua and Verma (1991) provided empirical evidence of equity mutual fund performance in India. They studied the investment performance of India’s first 7year close-end equity mutual fund, Master share. They found that the fund performed satisfactory for large investor in terms of rate of return. Ippolito (1992) expressed that fund/scheme selection by investors is based on past performance of the funds and money flows into winning funds more rapidly than they flow out of losing funds. Sarkar and Majumdar (1995) evaluated financial performance of five close-ended growth funds for the period February 1991 to August 1993, concluded that the performance was below average in terms of alpha values (all negative and statistically not significant) and funds possessed high risk.