It doesn’t matter whether you’re a seasoned stock market professional or a complete novice, you will see the benefit in using a stock calculator. Such a tool can save you a tremendous amount of time – especially when every second and minute count.
A stock calculator helps you to understand how much money your transactions will earn, also referred to as your stock return. You can also use it for working out the price you need to reach in order to break even, and your return on investment (ROI).
Don’t forget about your tax obligations when earning money on the stock market. Use a tax calculator to work out what you need to pay.
What Are Stocks?
A stock is a slip of paper or certificate that gives you partial ownership of a company. You get to share in all the joys and pitfalls of corporate ownership, such as making money and losing it. When you buy shares in the stock market, the quantity you buy gives you a certain percentage of the company. If, for example, you buy five shares out of 100 available to the market, you now own five percent of the company’s earnings and assets.
There are also two different stock types. Common stocks offer you the right to vote at shareholder meetings. Preferred stocks don’t, but you can often receive a higher asset share.
How to Determine the Stock Price
When it comes to determining the stock price, it’s quite the exact art. Once a stock goes to market, a valuation will take place, followed by an initial public offering (IPO). This format then determines the company value, all before it’s divided among issued stocks. Each stock represents a single share of the overall company’s value.
Even if you buy your stock for a set price, that doesn’t mean it will stay at that price. Once the company is on the market, the value of your share can change dramatically – sometimes in your favor, sometimes not. As a rule of thumb, when demand for the company’s products or services increase, so too does your stock share’s value.
How Do You Calculate Your Stock Profit?
The aim of the game when buying stocks is to purchase them while they are cheap, hold onto them, then sell them once they are worth more. You can then use a stock calculator to determine the profit of expenses versus revenue.
This is the stock calculation formula:Profit = [(SP x No) – SC] – [(BP x No) + BC]
SP = Stock Price
No = Number of stocks
SC = Selling Commission to pay
BP = Buying stock price
BC = Buying Commission
When you use this stock calculator, you can enter monetary and percentage values. Whichever value you submit, the empty value will automatically fill in.
Is Investing in Stocks a Good Idea?
Some people are morally against stocks, while others don’t see them as a lucrative investment. However, it’s important to let the math and calculations do all the talking. One of the ways in which to see whether investing in stocks is a good idea is by checking out your ROI or return on investment. Such a formula and calculation can let you know what percent of your initial investment you will get back as profit.
ROI = Profit / [(BP x No) + BC]
Your ROI is a percentage that means if, for example, your ROI is 100 percent, your revenue would be twice as high when you spend a sum of money on a market stock share.
When is a Good Time to Sell My Stocks?
You need to know when to hold ‘em and when to fold ‘em, but sometimes you need a calculator’s help to achieve that. A good time to sell your stocks is when you are at least breaking even, rather than when doing so will incur losses.
To calculate whether you are going to break even:
Break even = [ (BP x No) + BC] / [No x (1 – SC%)]