The Interest Coverage Ratio: How to Tell Whether a Company Can Actually Afford Its Debt
Interest coverage tells you, in one number, how much room a company has between what it earns and what it owes its lenders. A plain-English guide…
Blog
Behavioural finance
92 articles. Educational only: none of these is a research report or a recommendation.
Behavioural finance
Behavioural finance
Receivable Days: The Working-Capital Ratio That Reveals Whether Reported Profit Has Actually Turned Into Cash
A SEBI study found that roughly 9 out of every 10 individual traders in the equity derivatives segment lost money — a reminder that the fastest…
Behavioural finance
Lease Liabilities and Right-of-Use Assets: How Ind AS 116 Dragged India’s Off-Balance-Sheet Debt Into the Open
Since FY20, Ind AS 116 has required lease liabilities on the balance sheet. The Borrowings line is no longer the whole story of what a company…
Behavioural finance
The Auditor’s Opinion Hierarchy: How Unqualified, Qualified, Adverse & Disclaimer Reports Reveal Whether the Numbers Deserve Your Trust
India’s registered investor base has nearly quadrupled — from roughly 3 crore to more than 11 crore unique investors on the NSE in just a few…
Behavioural finance
Price-to-Operating-Cash-Flow (P/CFO) Ratio: The Valuation Multiple That Refuses to Trust Profits Until the Cash Arrives
Every valuation multiple is a fraction. The numerator — price — is set by the market every second and is always honest about what you are…
Behavioural finance
Cash Flow From Operations to Total Debt Ratio: The Credit-Analyst’s 60-Second Solvency Test That Separates Self-Liquidating Balance Sheets From Slow-Bleed Leverage Time Bombs
Every credit analyst at every rating agency on the planet — CRISIL, ICRA, CARE, Moody’s, S&P — runs one calculation before they bother with a single…
Behavioural finance
Cash & Equivalents as a Percentage of Market Cap: The Graham-Era Deep-Value Forensic Test That Reveals How Much You’re Actually Paying for the Operating Business
The Cash & Equivalents-to-Market-Cap ratio is the simplest forensic ratio in fundamental analysis — and one of the most misunderstood. It asks a single, almost child-like…
Behavioural finance
Goodwill-to-Net-Worth Ratio: The Forensic Balance-Sheet Test That Reveals Whether Indian Companies Bought Their Earnings Or Built Them Organically
How one balance-sheet line — Goodwill on Consolidation — reveals whether Indian companies grew their earnings organically or simply purchased them at a premium. A forensic…
Behavioural finance
Days Payable Outstanding: The Working-Capital Ratio That Reveals Negotiating Power or Hidden Liquidity Stress
Indian retail participation on NSE crossed 11 crore unique investors by early 2026, up from 3 crore in 2019. Yet the same SEBI study on the…
Behavioural finance
Borrowings-to-Equity Ratio: How One Balance-Sheet Line Separates Capital-Disciplined Compounders From Leverage-Driven Time Bombs
SEBI’s most recent investor-protection study found that nearly nine out of ten individual traders in the equity Futures & Options segment lost money in FY24 —…
Behavioural finance
Incremental Return on Invested Capital: The Mauboussin-Greenwald Compounder Test That Reveals Whether Every New Rupee of Capital Earns Its Keep
Headline RoIC describes legacy capital; Incremental RoIC describes the most recent rupees deployed. The Mauboussin-Greenwald compounder test, explained step-by-step with audited Indian disclosures.
Behavioural finance
Sloan’s Accrual Anomaly: The 1996 Accounting Review Discovery That High-Accrual Stocks Underperform — And Why the Cash-Backed Earnings Test Is the Single Most Powerful Forensic Filter for Indian Long-Term Investors
Richard Sloan 1996 Accounting Review discovery on high-accrual underperformance and the cash-backed earnings test for Indian long-term investors.
Behavioural finance
Defensive Interval Ratio: The Forensic Liquidity Metric That Reveals How Many Days a Business Can Survive Without Selling Inventory or Receiving New Revenue
Every Indian retail investor knows the headline risk — a company runs out of cash and the stock collapses. What very few investors know is that…
Behavioural finance
10-Year PAT CAGR: The Bottom-Line Compounding Test Every Indian Long-Term Investor Must Master
India crossed 11 crore unique demat accounts in 2025 — almost a 4x jump from the 3 crore investor base we had as recently as January…
Behavioural finance
Subsequent Events Disclosure (Ind AS 10): What ‘Events After the Reporting Period’ Reveal About Corporate Transparency, Investor Risk, and Management’s Willingness to Share Bad News on Time
India's investing universe has grown to over 11 crore investors, but few know how to read the most under-appreciated paragraph in any audited annual report. Ind…
Behavioural finance
The House Money Effect: Thaler & Johnson’s 1990 Discovery on Why Prior Gains Make Indian Long-Term Investors Take Reckless Risks With ‘Profit Money’
Thaler and Johnson 1990 documented the House Money Effect — investors take riskier bets with prior gains. Indian retail F&O data shows the pattern at population…
Behavioural finance
Depreciation-to-Gross-Block Ratio: How One Schedule II Disclosure Reveals Asset Newness, Implied Useful Life & Capital-Intensity Discipline
Indian retail participation on the NSE has expanded from roughly 3 crore unique investors in 2019 to more than 11 crore in 2026 — a 3.6x…
Behavioural finance
Wonderful Business at a Fair Price: The See’s Candies Pivot That Reshaped Buffett’s Mind in 1972 – and Why It Justifies Owning Quality Indian Compounders Today
In January 1972 Buffett wrote a $25 million cheque for See's Candies - the single most consequential trade of his career. Here is why Indian value…
Behavioural finance
The IKEA Effect: Norton, Mochon & Ariely’s 2012 Discovery That Labour Leads to Love
In 2011, three behavioural economists at Harvard Business School and Duke University — Michael I. Norton, Daniel Mochon and Dan Ariely — conducted a series of…
Behavioural finance
Employee Cost-to-Revenue Ratio: How a Single P&L Line Reveals Operating Leverage, Wage Discipline & Hidden Margin Risk
According to the SEBI “Analysis of Profit and Loss of Individual Traders Dealing in Equity F&O Segment” study, 93% of individual F&O participants incurred net losses…
Behavioural finance
Choice Overload & The Paradox of Choice: Iyengar & Lepper’s 2000 Jam Study and Sethi-Iyengar-Huberman-Jiang 2004 401(k) Evidence
In May 2026, the average Indian retail investor with a demat account can choose between roughly 5,000 listed equities on the NSE and BSE combined, ~1,500…
Behavioural finance
CEO-to-Median-Employee Pay Ratio: Companies Act §197(12) Read With Rule 5(1)(i)
If a value investor were allowed to study exactly one governance disclosure in an Indian annual report, the smart choice would not be the audit report,…
Behavioural finance
Negativity Bias: Baumeister, Bratslavsky, Finkenauer & Vohs (2001) ‘Bad Is Stronger Than Good’
If you have ever opened your portfolio after a bad market day and felt the loss with a sharper, longer, more visceral pain than the equivalent…
Behavioural finance
Audit Committee Composition and Independence: SEBI LODR Regulation 18 and Companies Act Section 177(2)
When the National Stock Exchange of India crossed the eleven-crore registered investor mark in early 2026 — having scaled from roughly three crore in 2020 —…
The securities quoted in these articles are for illustration only and are not recommendatory. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.