How to calculate sens*x

Nikhila (ca final student) (187 Points)

07 January 2011

How to Calculate Sens*x

BSE Sens*x, also known as Sensitive Index, is a stock market gauge in India that consists of 30 different stocks over a broad range of industries. To calculate Sens*x you must use the Free Float Market Capitalization method. Free float shares are shares available for trade on the open market. In order to calculate Sens*x, you must first understand how to calculate the Free Float Market Capitalization of each Sens*x company. Follow the steps below to get started.

Instructions

Calculating Free Float Market Cap of a Company
- 1
  
  Determine the market capitalization for a company, which is the number of outstanding shares multiplied by the market value of one share.
- 2
  
  Divide the number of shares readily available for trade on the market by the total number of shares outstanding. This should give you a percentage of shares that are free float.
- 3
  
  Round the free float factor up to the closest multiple of five to determine the category band for that company. For example, if a company has a free float factor of 0.32 (or 32%), round that up to 0.40, making the free factor band for that company ">35 - 40%." The range is so that frequent minor changes of a company's free float rarely alter its categorization.
- 4
  
  Multiply the market capitalization of the company (determined in Step 1) by the free float factor. The result is the company's Free Float Market Cap.
Calculating the Sens*x
- 1
  
  Find the index divisor by dividing the previous day's Free Float Marketing Cap by the previous day's Sens*x Value. For example, if yesterday's Free Float Market Cap was 340,000 and yesterday's Sens*x Value was 17,000, then the index divisor is 20.
- 2
  
  Add together the individual Free Float Market Cap for all 30 Sens*x companies to determine today's total Free Float Market Cap.
- 3
  
  Divide today's total Free Float Market Cap by the index divisor determined in Section 2, Step 1. The resulting number is the current Sens*x value. For example, divide today's Free Float Market Cap of 360,000 by the index divisor of 20 and you will get a Sens*x Value of 18,000.

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