Fundamental Analysis-How To Check Quality Of StockTools Used1.OPM- Operating Profit Margin,operating profit margin is a measure of profitability.It indicates how much of each rupee of revenue is left over after both costs of goods sold and operating expense are considered.2.ROCE- Return on Capital Employed Return on capital is also a profitability ratio.It measures the return that an investment generates for capital contributors,i.e. bondholders and stockholders. Return on capital indicates how effective,a company is at turning capital into profits.3.D/E Ratio- The debt-to-equity ratio is a measure of the relationship between the capital contributed by creditors and the capital contributed by shareholders.It also shows the extent to which shareholders' equity can fulfill a company's obligations to creditors in the event of a liquidation.How To Use The Tools1.OPM- Operating margins are important because they measure efficiency. The higher the operating margin, the more profitable a company's core business is.2.ROCE -A firm's return on capital can be an excellent indicator of the size and strength of its moat. If a company is able to generate returns of 15-20% year after year, it has a great system for transforming investor capital into profits.3.Low D/E- Lenders and investors usually prefer low debt-to-equity ratios because their interests are better protected in the event of a business decline. Thus, firms with high debt-to-equity ratios may not be able to attract additional capital.When To Buy1.The Growth rate of the stock should be more than the average industry rate or the average GDP rate.2.High ROCE- Atleast more than 15%3.Should be able to generate free cash flows4.Management QualityAdvantages1.Free Analysis2.Easy for new traders and beginners3.Good fundamental stocks4.Good for long term investors 5.Low RiskIF YOU LIKED THE STRATEGY THEN DO LIKE THE VIDEO AND SUBSCRIBE TO OUR CHANNEL AND NEVERMISS ANY OF OUR VIDEOS!HAPPY TRADING!