Why to buy?
- This worksheet answers following important questions:
- Present stock price is good for purchase?
- Business fundamentals of stock is strong or weak?
- Is the underlying business of this stock profitable?
- Price trend of this stock in last 10 years is good?
- Overall, this stock is a good buy or a bad buy?
Who can buy?
- Person with basic knowledge about stocks
- People who want to learn stock analysis
- People who want evaluate business fundamentals
- People who want check iF current price is good for investing
- People who want to know stocks intrinsic value
- People who want to invest in stocks but do not know where to start
- Buy if you want to learn fundamental analysis
- Its a simple Microsoft Excel Worksheet. Its not a software
- It can be used on Windows & Macbook with MS Office.
- People can use this worksheet only to "learn" stock analysis
- It is not a investment advice tool.
- The worksheet can be used only for non-banking stocks
- Beginners will take some time before fully utilizing this worksheet
- Companies must be listed in BSE/NSE for >10 years
- Watch the video before use (stock analysis worksheet guide)
- You can also read the help-sheet provided with the worksheet
- All data required by this worksheet is available in moneycontrol
- Watch the video to know how to grade stocks
- Stocks which earns grade above 85% is a perfect buy
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Why you will love it...
- It gives true value of stocks
- It tells, where lies the strength of the stock
- It tells, where stock is weak
- It rates stock as per its overall performance
- It keeps the user of worksheet engaged
- This worksheet is one of its kind available on internet
The purpose of stock analysis worksheet?
- Generally people buy stocks without knowing well about it. This is a mistake
- It allows people to invest in a company with bare minimum awareness about it
- This worksheet allow investor to "self verify" any stock before investing
- This worksheet is not a stock suggestion tool
- It does not give you any investment advice to its users
- It is a tool which one can use to LEARN stock analysis
- The purpose & utility of this worksheet is much larger.
- It helps its users to bring forward that hidden investors-knack
- This worksheet fulfills the necessity of doing fundamental analysis for long term investment
- People often get lost in study of fundamental analysis
- This worksheet is like "ready to use" tool to do fundamental analysis
- Along with stock analysis worksheet, we also provide a second worksheet named "Compare Stock".
- Stocks are compared with reference to 40 numbers different parameters
- "Compare Stock" is an easy to use worksheet having data of 500 companies already built-in.
- These 500 companies are top companies of their sector/Industry.
- "Compare Stocks" will allow users to analyze stocks based on growth rates, financial health, price appreciation, price valuation, & other key indicators.
- The stock's data provided in the "Compare Stocks" worksheet are static.
- Based on the latest financial data of companies available on internet, "Compare Stocks" has been developed.
What is stock analysis worksheet?
This is a simple Microsoft Excel Spreadsheet. This worksheet has been designed to analyze stocks.
What we mean by analyzing stocks? Before buying any stock, the person must know “important things” about that stock. This worksheet helps its users to know these “important things” about a stock.
These “important things” about stocks are basically those information’s which all investor must know before investing. These information highlights whether a stock is a good buy or not.
But how this worksheet know these “important things” about all Indian stocks? This is a very valid question.
If this is a simple Excel Spreadsheet, how it can know “important things” about all stocks? It is impossible, right? Yes, I accept that. But some manual data-entry, and few intelligent formulas can transform a simple Excel Spreadsheet into a stock genius.
What stock analysis worksheet does for its users?
I have tagged this worksheet as a stock genius, why?
What this worksheet does for its users is to make them realize the strength and weakness of the stock. This worksheet grades different parameters of a stock, and arrives at a conclusion.
The final conclusion of the stock under analysis will look like this:
The above snapshot shown is related to an Indian stock called CUMMINS INDIA. You can see in the conclusion that CUMMINS INDIA has scored high grades in Business Fundamentals, Profitability, and Price History. But when it comes to ‘Price Valuation’, the stock has earned low grades.
So what we can conclude about CUMMINS INDIA?
In terms of overall business, the stock is a fundamental powerhouse. But at present its market price is overvalued.
Hence the overall grade of CUMMINS INDIA is lower than generally what is recommended.
How stock analysis worksheet works?
This is not a software, it is a simple Excel Spreadsheet. Hence, to make this dead worksheet work, some efforts needs to be put in. But believe me, the end result will be worth the effort.
What kind of effort I am talking about?
To make this worksheet work seamlessly, one must copy and past few financial parameters of the stock to be analyzed.
Where one will get the needful financial parameters? It will be available in moneycontrol.com
Open the stock page in moneycontrol that you want to analyze (Example: stock page of CUMMINS INDIA)
In that stock page, following tabs will provide the data that needs to be copied from moneycontrol.
Copy the needful data from moneycontrol and paste it in stock analysis worksheet.
Which financial data needs to be copied from moneycontrol?
BALANCE SHEET: Total share capital, Reserves, Long term borrowing, Short term borrowing, Tangible assets, Total current liabilities, Total current assets, Cash and cash equivalents, Inventories, Trade receivables, Current investment.
PROFIT AND LOSS A/C: Total Revenue, Total Expenses, Net Profit (PAT), Depreciation, Basic EPS, Shares outstanding, Equity share dividend.
CASH FLOW STATEMENT: Net cash from operating activity, Net cash used in investing activity.
RATIOS: Return on net worth, Return on asset, PBDIT margin.
How much time it will take to copy and paste the above data?
Initially for a new person, this data transfer may take 30-40 minutes. But it also depends on the persons proficiency and internet speed available with the person.
After some practice, the data transfer will take considerably lesser time. I personally take less than 20 minutes to transfer all financial data from moneycontrol to stock analysis worksheet.
In addition to above financial data, following information also needs to be recorded in the stock analysis worksheet:
To let you know more about the data transfer, I have prepared a video. In this video I have shown all steps required to use this worksheet.
I will request you to see this video and get a better feel about how this worksheet really works.
Moreover, in the stock analysis worksheet itself, there is a HELP SHEET which also guides its users on how to use the worksheet.
This worksheet teach people to do fundamental analysis, how?
This is the most interesting aspect of this worksheet. Though I will admit that many people have suggested me to automate this process in worksheet.
I am talking about self-grading of different parameters of stocks by the user. Yes, the user of the worksheet provides grades to the stock, themselves.
This worksheet does not grade stock automatically. Though it is very easy to automate the grading procedure, but I have intentionally kept it manual. Why?
The biggest problem of stock investing is, people invest blindly in stocks. The purpose of worksheets like these is, to make people more aware about the stock before its purchase.
If the stock grading is made automatic, what users will do is to simply copy and paste the data from moneycontrol, and blindly believe the outcome of this worksheet.
This is not the purpose of this worksheet.
This worksheet is not a stock advice tool.
Instead it is a tool which makes its user LEARN the process of fundamental analysis.
But is the grading of stocks parameter complicated?
Not at all. One has to just compare the stock data with what is ideal, and give their own rating in scale of 1 to 5.
Lets see how the stock grading page looks like:
It hardly takes 10 minutes for the user to grade all the parameters. But the best part is, once you have done the grading, and you are not happy with the final CONCLUSION, you can re-evaluate your grades.
If this would have been done automatically by the worksheet, the possibility of revaluation would not have existed.
But, revaluation is good or bad?
This reiteration of grades by the user makes the user feel FULL OWNERSHIP on the final outcome (Conclusion). How?
Observing the stock parameters deeply, comparing them with ideal, and giving suitable grades based on ones understanding, provides immense insights to the user about the stock.
It will not be an overstatement to say that, repeated use of this worksheet (practice) will make the user a true stock investor over a period of time.
How the final results look like?
I have already shown you above that how the stock analysis worksheet displays the conclusion.
In addition to this, the stock analysis worksheet also provides representation of results in the form of charts.
The details that are visible in charts are as below:
* How P/E of stock compares with industry and Sensex P/E ratio.
* How P/B of stock compares with Sensex P/B ratio.
* What returns can be expected from this stock if bought at right price.
* Current Dividend Yield compares with last 10 years average dividend yield.
* Market price trend 30D, 50D, 150D & 200D SMA.
* Historical price trend of last 10 years.
* Graphical representation of grades achieved by the stock upon analysis.
How detailed is the analysis of this worksheet?
This worksheet analyze stocks based on following parameters:
1) Price valuation
2) Business fundamentals
2.1) Profitability of business &
3) Price history of last 10 years
But based on what parameters this worksheet analyzes the above 3 points? And how the result of this analysis is being presented to the user of this worksheet?
To conclude if a stock is correctly priced or not, this worksheet analyzes the stock’s current market price based on P/E ratio, P/B ratio, Dividend Yield & PEG Ratio.
But what this worksheet does best is to roughly calculate the intrinsic value of the stock.
Calculation of intrinsic value of stocks is a subject on its own. I am not sure how many people on this mother earth knows how to accurately estimate the intrinsic value of stocks.
The first such names that comes to mind are Late Benjamin Graham, Warren Buffett, Peter Lynch etc. I am sure the list will not be too long. The reason being; accurately estimating intrinsic value of a stock is a skill which is known only to the gifted few.
Hence, I will not boast that I have this skill. What I can claim is that, my stock analysis worksheet developed can estimate intrinsic value by being very conservative. Hence, the intrinsic value indicated in this worksheet is only for a general reference.
But personally speaking, with my own experience, this stock analysis worksheet works reasonably well. Even though it is not very accurate in estimating intrinsic value of stock, it is still reasonably effective.
Lets see how this worksheet analyzes price valuation of a stocks, and how it presents the same to its user:
Like wise, business fundamental and profitability of stocks are also analyzed by this worksheet.
The 10 years price history of stock is just a data input exercise. One the user inputs the historical 10 years prices in the worksheet format, the worksheet automatically does the other related iterations.