1.
Pinkey Jain - co-Founder and co-CEO
2. Gunbir Sethi Gauba - co-Founder and co-CEO
3. Dhriti Wadhwani - CFO & Head of India Operations
Products-
Consensus estimates -Sophisticated Stable API Technology, Real-time Earnings Auto-
update , Flexible Customized User Interface
Company models - Near-Real-time, Earnings Update ,Actuals & Estimates History
,Guidance History, In Sync Consensus® Estimates, Company Models ,Company Filings
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1. Ratio
1. Liquidity ratio
Current ratio
Quick ratio
Absolute quick ratio
2. Profitability ratio
Gross profit ratio
Net profit ratio
3. ROCE
ROA (return on asset)
ROFA (return on fixed asset)
4. Solvency ratio
Debt to equity ratio
proprietor Ratio
interest coverage ratio
dividend Coverage ratio
5. Turnover Ratio
stock turnover
debtor turnover
Credit turnover
2. Uses of ratio
Ratio analysis is a vital tool for assessing a company's financial position, profitability, liquidity, risk,
solvency, efficiency, and fund utilization. It also helps company shareholders make investment
decisions by comparing financial results and trends
• Financial ratios are grouped into the following categories: Liquidity ratios, Leverage ratios,
Efficiency ratios, Profitability ratios, Market value ratios.
3. Financial ratio
1. Liquidity Ratio . why ? to determine a company's ability to pay its short-term debt obligations.
(A) Liquidity= current Assets / current liabilities (2:1)
- For e.g. if current ratio is 3:1 - asset is 3 times the current liab
Reason: blocking your funds which will not give a return.
(B) Quick ratio . why ? A higher quick ratio signals that a company can be more liquid and
generate cash quickly in case of emergency
= current Assets- stock + prepaid expenses / current Liabilities (1:1)
(C) Absolute quick ratio
= cash bank + short term investment + marketable securities / current liabilities - bank overdraft
(standard ratio is 0.5:1) greater than 0.5 is progressive
2. Profitability Ratio (it shows that the business is highly capable of generating profits regularly.)
(A) Gross profit = Gross profit / net sales*100
(B) net profit = net profit / net sales*100
4. Return on capital employed (Return on capital employed (ROCE) is a good baseline measure
of a company's performance)
= EBIT / Capital employed*100
= EBIT / share + reserves surplus+ debenture.
[ • EBIT
- Tax
= EBT
-tax
= EAT
- profit
= Earnings ]
4 . Return on asset = EBT / total asset
5. Return on fixed Assets = EBT / fixed Assets
3. solvency ratio. why? A solvency ratio is a key metric used to measure an enterprise's ability
to meet its long-term debt obligations
(A) Debt equity Ratio (higher the ratio is good) It basically shows the overall health of a
particular company
= debt(lia) / equity*100
(B) proprietor Ratio (useful for determining the amount or contribution of shareholders or
proprietors towards the total assets of the business.)
= Shareholders fund / total assets
= Current assets - current liabilities/ total assets
(C) interest coverage ratio (helps to avail a better idea about a firm's stability when it comes to
interest on debt pay-outs or defaults.)
= EBIT / interest
(D) dividend Coverage ratio ( It shows how much of a company's income it pays out to investors)
= EAT / preference dividend
4. Turnover Ratio (It can provide insight into a company's financial performance and help to
identify potential problems or areas for improvement.)
(A) stock turnover ratio = net sales / (opening stock+ closing stock)/2
(B) debtor turnover ratio = credit sales/ (opening debtor
( bills receivables) + closing stock (debtors)/2
(C) Credit turnover ratio = credit purchase/ opening creditors + closing creditors/2
5. Operating leverage (it can help you understand the appropriate price-point for covering your
costs and generating a profit.)
(A) operating ratio = contribution/ EBIT
(B) financial leverage ( it determines how much of the capital that is present in the company is in
the form of debts)
= EBIT/EBT
• Total leverage= operating leverage* financial leverage
Capital budgeting
1. Discounted cash flow . why ? to estimate the money an investor would receive from an
investment, adjusted for the time value of money
Discounted cash flow (DCF) refers to a valuation method that estimates the value of an investment
using its expected future cash flows. DCF analysis attempts to determine the value of an investment
today, based on projections of how much money that investment will generate in the future.
• DCF= Cash flow¹/(1+r) ^n
2. payback period = initial investment / annual cashflow
3. ARR = Avg net income / original investment OR avg net income / avg investment
4. IRR = L + P1-P0 / P1-P2 *D
L- lower rate of interest
P1- pv of lower rate of interest
P2- pv of high rate of interest
C0- cash outlay
D- difference in ROI
5. NPV = (Cashflow / (1+r) ^N – initial investment)
6. Profitability index = pv of cash inflow/ pv of cash outflow
Basic rules of accounting
1. Debit the receiver and credit the giver personal account
2. Debit what comes in and credit what goes out Real account
3. Debit expenses and losses, credit income and gains nominal account
