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IMPORTANT INSTRUCTIONS
1. Ensure that the company whose data you are downloading has numbers at least starting from FY08 (March 2008). This is be
from, say, FY10, you will see incorrect data for FY08 and FY09 (which will be of Hero Motocorp on whose financials I have crea
2. All financial data of your chosen company will be automatically updated in the sheet you download, except "Cash and Bank"
figures, which you must update manually from the company's annual reports. Don’t forget to make these changes as these num
3. You may update the sheet and add your own analysis, formulae etc. and then upload again to Screener.in site using the Step
"Data Sheet" because this will cause errors in your future downloads.
4. DON’T touch any cell except the black ones, where you are required to update the numbers manually from Annual Reports (j
the growth assumptions etc.
4. I have added Comments and Instructions wherever necessary so as to explain the concepts. Read those carefully before wo
5. This sheet is not a replacement of the work required to read annual reports as part of the analysis process. So please do tha
some discrepancy in numbers (though rare), but you will know this only when you read annual reports.
6. I could not find a bug/errors in this spreadsheet, but if you notice some, please email me at - vishal@safalniveshak.com - and
7. I will keep on updating the sheet from time to time and will update the same on the website. I invite you to share your feedba
together.
8. This excel won't work for banking and financial services companies.
Conclusion
Never Forget
Buffett Checklist - Read, Remember, Follow!
Source - Buffettology by Mary Buffett & David Clark
Explanation
Seek out companies that have no or less competition, either due to a patent or brand name or similar intangible that
makes the product unique. Such companies will typically have high gross and operating profit margins because of their
unique niche. However, don't just go on margins as high margins may simply highlight companies within industries with
traditionally high margins. Thus, look for companies with gross, operating and net profit margins above industry norms.
Also look for strong growth in earnings and high return on equity in the past.
Try to invest in industries where you possess some specialized knowledge (where you work) or can more effectively
judge a company, its industry, and its competitive environment (simple products you consume). While it is difficult to
construct a quantitative filter, you should be able to identify areas of interest. You should "only" consider analyzing
those companies that operate in areas that you can clearly grasp - your circle of competence. Of course you can
increase the size of the circle, but only over time by learning about new industries. More important than the size of the
circle is to know its boundaries.
Seeks out companies with conservative financing, which equates to a simple, safe balance sheet. Such companies
tend to have strong cash flows, with little need for long-term debt. Look for low debt to equity or low debt-burden ratios.
Also seek companies that have history of consistently generating positive free cash flows.
Rising earnings serve as a good catalyst for stock prices. So seek companies with strong, consistent, and expanding
earnings (profits). Seek companies with 5/10 year earnings per share growth greater than 25% (along with safe
balance sheets). To help indicate that earnings growth is still strong, look for companies where the last 3-years
earnings growth rate is higher than the last 10-years growth rate. More important than the rate of growth is the
consistency in such growth. So exclude companies with volatile earnings growth in the past, even if the "average"
growth has been high.
Like you should stock to your circle of competence, a company should invest its capital only in those businesses within
its circle of competence. This is a difficult factor to screen for on a quantitative level. Before investing in a company,
look at the company’s past pattern of acquisitions and new directions. They should fit within the primary range of
operations for the firm. Be cautious of companies that have been very aggressive in acquisitions in the past.
Buffett prefers that firms reinvest their earnings within the company, provided that profitable opportunities exist. When
companies have excess cash flow, Buffett favours shareholder-enhancing maneuvers such as share buybacks. While
we do not screen for this factor, a follow-up examination of a company would reveal if it has a share buyback plan in
place.
Seek companies where earnings have risen as retained earnings (earnings after paying dividends) have been
employed profitably. A great way to screen for such companies is by looking at those that have had consistent
earnings and strong return on equity in the past.
Consider it a positive sign when a company is able to earn above-average (better than competitors) returns on equity
without employing much debt. Average return on equity for Indian companies over the last 10 years is approximately
16%. Thus, seek companies that earn at least this much (16%) or more than this. Again, consistency is the key here.
That's what is called "pricing power". Companies with moat (as seen from other screening metrics as suggested above
(like high ROE, high grow margins, low debt etc.) are able to adjust prices to inflation without the risk of losing
significant volume sales.
Companies that consistently need capital to grow their sales and profits are like bank savings account, and thus bad
for an investor's long term portfolio. Seek companies that don't need high capital investments consistently. Retained
earnings must first go toward maintaining current operations at competitive levels, so the lower the amount needed to
maintain current operations, the better. Here, more than just an absolute assessment, a comparison against
competitors will help a lot. Seek companies that consistently generate positive and rising free cash flows.
Sensible investing is always about using “folly and discipline” - the discipline to identify excellent businesses, and wait
for the folly of the market to drive down the value of these businesses to attractive levels. You will have little trouble
understanding this philosophy. However, its successful implementation is dependent upon your dedication to learn and
follow the principles, and apply them to pick stocks successfully.
Net Block 289 284 393 451 622 643 638 786 911 948
Capital Work in Progress 20 12 14 93 189 206 240 205 220 369
Investments 57 57 57 1 1 1 1 15 10 11
Other Assets 407 457 602 1,136 914 955 1,127 1,310 1,579 1,352
Total 773 810 1,066 1,681 1,726 1,806 2,005 2,315 2,721 2,680
Working Capital 22 78 118 658 383 429 459 496 724 471
Debtors 123 150 161 156 109 135 109 150 115 242
Inventory 196 194 311 362 382 377 393 548 438 477
Cash & Bank** 4,735 3,367 3,190 3,393 2,605 3,546 4,739 5,829
** Manually enter this number; Convert to Rs Crore if not already done in the Annual Reports; Use Cash+Bank+Current Investments from Consolidated Balance Sheet in Annual Reports
Debtor Days 60 57 38 27 20 24 17 18 14 26
Inventory Turnover 4 5 5 6 5 5 6 6 7 7
Fixed Asset Turnover 2.6 3.4 4.0 4.6 3.2 3.1 3.7 3.8 3.4 3.6
Debt/Equity 0.7 0.5 0.7 0.1 0.0 0.0 0.0 0.0 0.1 0.0
Return on Equity 52% 19% 11% 70% -2% 5% 6% 9% 6% 3%
Return on Capital Employed 56% 12% 14% 85% -1% 4% 8% 14% 9% 6%
Profit & Loss Account / Income Statement
FORCE MOTORS LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Trailing
Sales 751 956 1,565 2,085 1,973 2,022 2,364 3,025 3,069 3,430 3,641
% Growth YOY 27% 64% 33% -5% 2% 17% 28% 1% 12%
Expenses 857 958 1,441 1,992 1,953 1,941 2,236 2,792 2,874 3,257 3,317
Material Cost (% of Sales) 76% 70% 68% 72% 73% 70% 70% 74% 69% 76% Check for wide fluctuations in key
Power and Fuel 2% 2% 2% 2% 2% 2% 2% 2% 1% 1% expense items. For manufacturing
Other Mfr. Exp 7% 7% 6% 5% 5% 5% 4% 4% 3% 3% firms, check their material costs etc. For
Employee Cost 16% 13% 13% 12% 13% 12% 12% 10% 11% 11% services firms, look at employee costs.
Selling and Admin Cost 5% 5% 3% 3% 4% 4% 4% 3% 3% 2%
Operating Profit -107 -1 124 93 20 80 128 232 195 174 324
Operating Profit Margin -14% 0% 8% 4% 1% 4% 5% 8% 6% 5% 9%
Other Income 367 96 6 985 44 60 66 71 86 61 60
Other Income as % of Sales 48.9% 10.1% 0.4% 47.3% 2.2% 3.0% 2.8% 2.4% 2.8% 1.8% 1.6%
Depreciation 42 42 45 60 70 85 81 92 113 129 143
Interest 35 17 23 35 8 9 7 5 6 7 9
Interest Coverage(Times) 6 3 4 29 -1 6 17 40 30 16 27
Profit before tax (PBT) 183 36 61 983 -15 46 106 207 162 99 232
% Growth YOY -80% 70% 1510% -102% -406% 129% 95% -22% -39%
PBT Margin 24% 4% 4% 47% -1% 2% 4% 7% 5% 3% 6%
Tax 66 -18 23 187 5 -15 24 70 55 53 64
Net profit 117 54 38 796 -20 61 82 137 107 46 169
% Growth YOY -54% -30% 2011% -103% -407% 34% 67% -22% -57%
Net Profit Margin 16% 6% 2% 38% -1% 3% 3% 5% 3% 1% 5%
EPS 88.8 40.6 28.5 602.6 -15.1 46.4 62.2 103.8 80.8 34.4 127.9
% Growth YOY -54% -30% 2011% -103% -407% 34% 67% -22% -57%
Price to earning 0.8 9.0 26.7 0.8 -24.1 8.1 25.5 30.9 57.0 85.7 13.9
Price 69 364 761 485 365 374 1,588 3,209 4,604 2,952 1,780
Dividend Payout 0.0% 6.5% 11.2% 1.6% 27.7% 5.1% 6.5% 7.4% 7.3% 9.0%
Market Cap 92 482 1,006 641 482 494 2,099 4,240 6,084 3,901
Retained Earnings 117 50 33 784 -14 58 77 127 99 41
Buffett's $1 Test 2.8
Check for long term vs short term trends here. Check if the growth over
past 3 or 5 years has slowed down / improved compared to long term (7
to 10 years) growth numbers.
Cash Flow Statement
FORCE MOTORS LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Total
Cash from Operating Activity (CFO) -34 59 74 -139 83 116 226 256 471 256 1,367
% Growth YoY -271% 25% -289% -160% 39% 95% 13% 84% -46%
Cash from Investing Activity 277 -20 -158 815 -304 -100 -96 -210 -621 -81 -497
Cash from Financing Activity -243 -30 73 -228 -16 -30 -45 -37 180 -223 -598
Net Cash Flow -1 9 -11 447 -237 -14 85 9 30 -47 271
CFO/Sales -5% 6% 5% -7% 4% 6% 10% 8% 15% 7%
CFO/Net Profit -29% 109% 195% -17% -417% 189% 275% 186% 441% 564%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -349 -153 -291 -704 -524 -821 -930 -1,382 -767 -568 -6,489
Average FCF (3 Years) -906
FCF Growth YoY -56% 90% 142% -26% 57% 13% 49% -44% -26%
FCF/Sales -47% -16% -19% -34% -27% -41% -39% -46% -25% -17%
FCF/Net Profit -280% -253% -496% -85% -3668% -1057% -918% -773% -427% -386%
Operating Margin -14.2% -0.2% 7.9% 4.5% 1.0% 4.0% 5.4% 7.7% 6.3%
PBT Margin 24.4% 3.8% 3.9% 47.2% -0.8% 2.3% 4.5% 6.8% 5.3%
Net Margin 15.6% 5.6% 2.4% 38.2% -1.0% 3.0% 3.5% 4.5% 3.5%
Debtor Days 59.8 57.4 37.6 27.4 20.1 24.4 16.8 18.1 13.7
Inventory Turnover 3.8 4.9 5.0 5.8 5.2 5.4 6.0 5.5 7.0
Fixed Asset Turnover 2.6 3.4 4.0 4.6 3.2 3.1 3.7 3.8 3.4
Debt/Equity 0.7 0.5 0.7 0.1 0.0 0.0 0.0 0.0 0.1
Debt/Assets 20.8% 18.2% 23.2% 3.6% 2.4% 2.9% 1.0% 0.6% 7.4%
Interest Coverage (Times) 6.2 3.1 3.6 29.0 -0.8 6.0 17.2 40.0 30.2
Return on Equity 51.6% 18.9% 11.3% 69.6% -1.7% 5.0% 6.2% 9.2% 6.4%
Return on Capital Employed 56.2% 12.3% 14.5% 84.7% -0.6% 4.3% 8.4% 14.1% 9.0%
Free Cash Flow (Rs Cr) -349 -153 -291 -704 -524 -821 -930 -1,382 -767
Mar/18
11.8%
-39.0%
-57.4%
0.0%
-45.5%
-26.0%
5.1%
2.9%
1.3%
25.7
7.2
3.6
0.0
0.0%
15.8
2.5%
5.9%
-568
What to look for?
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency
Higher isn't always better, esp. when the company is generating high ROE, which means the management is allocating capital
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency, plus the nature of the industry. Also compare with industry
Higher is better, but also look for long term stability and consistency, plus the nature of the industry. Also compare with industry
Higher is better, but also look for long term stability and consistency, plus the nature of the industry. Also compare with industry
4,000
Revenue Revenue and Pro
2500%
Check for a rising trend. Check for a ris
3,500 2000% Compare grow
3,000
1500%
2,500
1000%
2,000
1,500 500%
1,000 0%
Jan/10 Jan/12
500 -500%
- -1000%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Revenue Growth
Net Profit Grow
Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
ROE 52% 19% 11% 70% -2% 5% 6% 9% 6%
ROCE 56% 12% 14% 85% -1% 4% 8% 14% 9%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Cash Flow -34 59 74 -139 83 116 226 256 471
Free Cash Flow -349 -153 -291 -704 -524 -821 -930 -1,382 -767
%
Capital Allocation Quality
Check for a rising trend and/or consistency.
% Numbers > 20% long term are good. Also check if the company
has zero/marginal debt. Compare with a close competitor Note: Please ignore the dates
% on the X-axis. The figures are
% for/as on the year ending date,
which for most Indian
% companies would be 31st
March of that year
%
%Jan/09 Jan/11 Jan/13 Jan/15 Jan/17
ROE ROCE
%
%
%
%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18
%
%
Revenue Growth PBT Growth
Net Profit Growth
Mar/18
3%
6%
Mar/18
3,430
99
46
Mar/18
256
-568
Common Size P&L
Rs Cr Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Raw Material Cost 76% 70% 68% 72% 73% 70% 70% 74% 69% 76%
Change in Inventory -4% -1% 2% 2% 2% 0% 0% 2% -2% 1%
Power and Fuel 2% 2% 2% 2% 2% 2% 2% 2% 1% 1%
Other Mfr. Exp 7% 7% 6% 5% 5% 5% 4% 4% 3% 3%
Employee Cost 16% 13% 13% 12% 13% 12% 12% 10% 11% 11%
Selling and Admin Cost 5% 5% 3% 3% 4% 4% 4% 3% 3% 2%
Other Expenses 4% 2% 3% 3% 3% 4% 3% 3% 3% 3%
Operating Profit -6% 1% 4% 1% -2% 4% 5% 3% 11% 2%
Other Income 49% 10% 0% 47% 2% 3% 3% 2% 3% 2%
Depreciation 6% 4% 3% 3% 4% 4% 3% 3% 4% 4%
Interest 5% 2% 1% 2% 0% 0% 0% 0% 0% 0%
Profit Before Tax 25% 4% 5% 49% 1% 3% 5% 8% 8% 6%
Tax 9% -2% 1% 9% 0% -1% 1% 2% 2% 2%
Net Profit 17% 6% 4% 40% 1% 4% 4% 6% 6% 4%
Dividend Amount 0% 0% 0% 1% 0% 0% 0% 0% 0% 0%
P.S. In case of companies earning negative FCF, where this model will not work, you must use a normalized positive FCF as
starting number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the his
this business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of
Calculation
by Mohnish Pabrai
Avg 5-Yr Net Profit (Rs Crore) 86.6 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate (108.9) Long-Term Growth Rate
Ben Graham Value (Rs Crore) (18,137) Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 2,347 Current Market Cap (Rs Crore)
EXPLANATION
Ben Graham's Original Formula: Value = EPS x (8.5 + 2G)
Here, EPS is the trailing 12 month EPS, 8.5 is the P/E ratio of a stock with 0% growth and g is the growth rate for the next 7-10
86.6
8.5
(217.9)
(37,010)
2,347
e of around 1962 when Graham was publicizing his works, the risk free interest rate was 4.4% but to adjust to the present, we divide this nu
e present, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
Dicounted Cash Flow Valuation
FORCE MOTORS LTD
Final Calculations
Terminal Year (3,275)
PV of Year 1-10 Cash Flows ###
Terminal Value ###
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) 2,347
META
Number of shares 1.32
Face Value 10
Current Price 1780.35
Market Capitalization 2346.5
Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 849.22 629.06 837.56 744.45 892.99 749.52
Expenses 774.18 600.18 745.62 707.16 813.22 704.05
Other Income 20.05 23.81 24.18 28.16 9.42 9.69
Depreciation 26.25 27.4 34.12 30.78 31.85 32.7
Interest 0.84 0.65 3.12 3.44 0.99 0.57
Profit before tax 68 24.64 78.88 31.23 56.35 21.89
Tax 17.72 1.39 23.97 1.27 14.61 7.24
Net profit 50.28 23.25 54.91 29.96 41.74 14.65
Operating Profit 75.04 28.88 91.94 37.29 79.77 45.47
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 13.18 13.18 13.18 13.18 13.18 13.18
Reserves 214.34 270.14 321.1 1130.12 1139.77 1212.84
Borrowings 160.92 147.83 246.92 59.69 41.99 52.89
Other Liabilities 384.71 379.22 484.37 478.3 531.22 526.61
Total 773.15 810.37 1065.57 1681.29 1726.16 1805.52
Net Block 289.25 284.31 392.53 450.72 621.59 643.29
Capital Work in Progress 20.15 12.23 14.31 93.37 188.99 205.77
Investments 57.16 56.74 56.74 0.95 1.18 1.23
Other Assets 406.59 457.09 601.99 1136.25 914.4 955.23
Total 773.15 810.37 1065.57 1681.29 1726.16 1805.52
Receivables 122.89 150.23 161.36 156.43 108.8 135.08
Inventory 196.03 193.73 311.31 362.4 381.63 377.25
Cash & Bank 16.63 25.71 14.76 462.09 225.15 216.09
No. of Equity Shares 13213802 13213802 13213802 13213802 13213802 13213802
New Bonus Shares
Face value 10 10 10 10 10 10
CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity -34.26 58.67 73.57 -139.22 83.26 115.67
Cash from Investing Activity 276.59 -19.58 -157.7 814.52 -304.11 -99.57
Cash from Financing Activity -242.97 -29.97 73.43 -227.91 -16.1 -30.18
Net Cash Flow -0.64 9.12 -10.7 447.39 -236.95 -14.08
DERIVED:
Adjusted Equity Shares in Cr 1.32 1.32 1.32 1.32 1.32 1.32
DO NOT MAKE ANY CHANGES TO THIS SHEET
10 10 10 10
TESTING:
This is a testing feature currently.
You can report any formula errors on the worksheet at: screener.feedback@dalal-street.in
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