 In order to understand the financial performance of a company, we have learned that there are different types of financial statements that help us in understanding how a company or an organization is performing in financial terms. So just by looking at the financial statements give you a summary that this is how the things are moving on and the company is doing good or doing bad but at the top of it, there is a very significant concept which helps us to analyze the financial performance of a company in detail and that particular concept is the concept of financial ratios. So what are the financial statements or the financial performance of an organization over time? Is it doing good? Is it doing bad? To analyze this, we use the concept of financial ratios to analyze it in a much better way and to understand the financial statements or financial performance, we have a lot of different types of financial ratios available which help us to understand what financial statements are trying to tell us or how we can carefully analyze the financial statements in order to understand the overall performance of a company or if you want to match your company's financial performance with different companies or if you want to do a comparison, financial ratios help you to understand all these aspects. So basically, these ratios help you in summarizing the information that is provided in the three different types of financial statements which we have already discussed. So while I was discussing the financial statements, I discussed the concept of total shareholder return. We also learned the formula and we also learned the numerical example. So this information helps you in providing the information to your investor that this is the overall return which is earned by this company and that can help the investor to decide whether he or she will invest in your company's stock or company's share or not. So overall, what was your rate of return in your share terms? So this is how they can evaluate whether or not they need to invest in your company's share or not. So this is how they can evaluate what kind of a share they want to invest in. or what is your share by. So this is how they can evaluate whether or not they need to invest in your share in your company's share or not. So that gives you the overall financial profitability or its return through it. And it is basically or in other words, we can say that this is the total amount that you are going to return to the investor in return to you. And how do we calculate the TSR? You have to take the current price of the share for it. For that, you have to take the purchase price or initial time period at which time period you did that bike or you sold it in the market. You have to take the price at that time period which we are calling the initial price or purchase price. And by the end of the year, which is the price of it, you will consider it. So the purchase price will come out of the current price and it will be added at the end of the year. The company has announced a dividend and you will divide this whole thing with your purchase price. So that will give you the value of TSR or internal rate of return, which you are going to get from investing in the share of that particular company we are talking about. So let's assume that there is this company, there is an investor who has bought a 100 share of a company and the purchase price of it is $20 per share. And he has still kept that share with him. And by the end of the year, the dividend on every share which is 100 rupees per share, the company has given you a dividend of 4.5 dollars. And now to calculate the current price, the current price has increased from $20 to $2024. So we just saw the formula that how to calculate the value of TSR. So now you have three things that you need in the formula. So you subtract the current price which is $24 from the initial price on which you have bought that share. And that was $20. And this was added to the dividend of 4.50. So in the numerator, the current price minus the purchase price, you will add the dividend in the difference. This will make your numerator. And in the denominator, you will keep your original price on which you have bought that share. And you will solve it. And if you want to express it in percentage, the overall return in percentage form is internal rate of return or TSR value. So in this example, it turns out to be 42.5. So which is something considered to be a good return. So sufficiently high because what you bought in the share of $20 was just $24. So that means that on average, there is this return of 42.5 percent which you are going to get. So it is important that whenever we calculate any financial ratios or whenever we calculate TSR in particular, there are some other financial ratios also which we are going to discuss in subsequent sessions. But when we are talking about financial ratios, then it is important. There are several key points that are to be considered that there are whenever we invest in any stocks, we can earn money in two ways. One is when you stocked it, its value may be from the interaction of demand or supply, over time increased. You will sell it, you can make money from there in the market. And the second way is that the investor has money to earn that if the company in which you have bought shares, it did well, it has given very good financial performance, then you will get dividends from it. So these are the two ways through which an investor can make money by investing in the stocks of a company. And when we calculate the total shareholders' return, it considers the capital gain and the dividends to gather. So this is what we have already discussed. And when we consider the value of IRR or TSR, i.e. the total shareholder return value, we see that it is very easy to understand because when you look at its formula, then it is just the difference between the current price and the original price. And the dividend is being added and you are taking out its ratio in terms of the price which you have paid in order to buy the thing. So since the concept is very easy, therefore it becomes easy for us to understand what it is telling us. This means that if you are going to buy a stock of Rs.20 and you are getting the current price of Rs.24, you are earning from it plus you have also received a dividend of Rs.4.5. So your total profit is a good high which has been calculated in this example as 42.5%.