Stock Valuation & Financial Health

The Importance of Financial Statements

• Understanding the Balance Sheet, Income Statement, and Cash Flow Statement
• Key financial metrics: Earnings, Assets, Liabilities, Equity, Cash Flow

Interpreting the Balance Sheet

• How to assess company assets, liabilities, and shareholders’ equity
• Key ratios: Debt-to-Equity, Current Ratio, Quick Ratio

Analyzing the Income Statement

• Understanding Revenue, Profit Margins, Operating Income, and Net Income
• Key profitability ratios: Gross Margin, Operating Margin, Net Profit Margin

Understanding Cash Flow Statements

• Cash from operations, investing, and financing
• How to evaluate the quality of earnings by looking at cash flow

Profitability Ratios

• Return on Assets (ROA), Return on Equity (ROE), Return on Investment (ROI)
• Gross Profit Margin vs Operating Profit Margin

Free Cash Flow Analysis

• What is Free Cash Flow (FCF) and why it matters?
• FCF as a measure of financial health and its role in valuation

Price-to-Earnings (P/E) Ratio

• What is the P/E ratio, and how to interpret it
• The difference between trailing P/E and forward P/E
• Limitations and considerations when using P/E ratio

Price-to-Book (P/B) Ratio

• How to calculate and interpret the P/B ratio
• Identifying undervalued and overvalued stocks using P/B ratio
• Limitations and when to use P/B over P/E

Price-to-Sales (P/S) Ratio

• Understanding the P/S ratio and its relevance for startups and high-growth companies
• When and how to use P/S ratio for stock valuation

EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization)

• What is EV/EBITDA and why it’s a key valuation tool for companies with debt
• How to interpret EV/EBITDA ratios and apply them to different industries

Price/Earnings to Growth (PEG) Ratio

• Introduction to PEG ratio and its usefulness for growth companies
• How to calculate and apply the PEG ratio in stock analysis

Piotroski F-Score

• What is the Piotroski F-Score?
• How to calculate the Piotroski score and what it indicates about a company’s financial health
• Using Piotroski score as a screening tool for value stocks

Graham Number Analysis

• Understanding Benjamin Graham’s method of calculating the intrinsic value of a stock
• Formula and application of Graham Number in stock selection
• Identifying undervalued stocks using Graham’s formula

Stock Screening Process

• Introduction to stock screeners and how to use them effectively
• Key criteria to look for when screening for undervalued stocks
• Screening for financial health, profitability, and valuation metrics

Building a Portfolio Based on Fundamental Analysis

• How to build a diversified portfolio using fundamental analysis
• Asset allocation based on risk tolerance and market conditions
• Rebalancing your portfolio: When and why to make adjustments

Managing Risk in Stock Picking

• The importance of risk assessment and avoiding overconcentration in one stock or sector
• How to use fundamental analysis to limit risk exposure
• Stop-loss strategies and diversification techniques

Using Margin of Safety in Stock Selection

• The concept of margin of safety and how to apply it in fundamental analysis
• Calculating intrinsic value vs market value to find undervalued stocks

Key Financial Ratios for Health Assessment

• Liquidity Ratios: Current Ratio, Quick Ratio, and Cash Ratio
• Profitability Ratios: Operating Margin, Net Margin, and Return on Equity (ROE)
• Efficiency Ratios: Asset Turnover, Inventory Turnover, Receivables Turnover

Leverage and Solvency Ratios

• Debt-to-Equity, Debt-to-Assets, and Interest Coverage Ratios
• Assessing a company’s ability to meet long-term obligations and financial sustainability

Analyzing Banking Stocks

• Key metrics for evaluating banks: Net Interest Margin (NIM), Asset Quality, Capital Adequacy Ratio (CAR)
• Understanding Non-Performing Assets (NPA) and its impact on bank stocks
• Evaluating a bank’s liquidity, loan portfolio, and profitability

Analyzing NBFC (Non-Banking Financial Companies) Stocks

• Key metrics for evaluating NBFCs: Return on Assets (ROA), Return on Equity (ROE), and Asset Quality
• Importance of leverage, credit ratings, and capital adequacy in NBFC analysis
• Regulatory and liquidity risks faced by NBFCs

Practical Application – Banking & NBFC Stock Analysis

• How to use the key ratios and indicators for analyzing banks and NBFCs
• Case study analysis of banking and NBFC stocks based on financial health and market position