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Company analysis

Presented By:

B.SAI KIRAN (12NA1E0036)

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Steps of Company

Analysis

Measuring Earnings

!re"asting Earnings

A##$ied %a$uati!ns

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Measuring

EarningsMeasure&ent !' earnings is ased !n t!ty#es !' in'!r&ati!n:

1) Interna$ In'!r&ati!n "!nsists !' data ande*ents &ade #u$i" y +r&s "!n"erning t,eir!#erati!ns.

2) E-terna$ s!ur"es !' in'!r&ati!n are t,!se

generated inde#endent$y !utside t,e"!any. ,ey #r!*ide su##$e&ent t!interna$ s!ur"es .

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Ba"/!ne !' Interna$ in'!r&ati!nIn"!&e State&ent

Ba$an"e s,eet

State&ent !' as, !s

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Ba"/!ne !' E-terna$ in'!r&ati!nRating agen"ies re#!rts

E"!n!&i" sur*eys

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e#re"iati!n A""!untingIt re"!gnies t,at an asset i$$ e e-,austed

at s!&e reas!na$e #!int !' ti&e. S! e needt! dedu"t t,eir "!st .

In t,e sa&e +r& a$$ assets are n!tde#re"iated !n t,e sa&e asis 4and s,i'ts int,e rate !' ",arge 5! ta/es #$a"e !*er ti&e.

!&&!n$y used &et,!ds '!r riting !'de#re"iati!n :

1. Straig,t 7ine &et,!d

2. 8ritten d!n *a$ue

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N!tes t! t,e inan"ia$ State&ents!!tn!tes t! t,e a$an"e s,eet !'ten s,! &any !'

t,e '!$$!ing ite&s !' i!rtan"e t! t,e ana$yst:9

1) !ntingent $iai$ities '!r ta-es 4di*idends4 and

#ending $asuits.2) Parti"u$ars !n !#ti!ns !utstanding 4$eases 4 $!ans and

!t,er +nan"ing arrange&ents.

3) ,anges in a""!unting #rin"i#$es and

te",niues4in"$uding ases !' *a$uati!n4 and t,e"urren"y ee"t !n in"!&e.

;) a"ts !' i!rtan"e !""urring eteen t,e a$an"e9s,eet data and date !' su&issi!ns !' state&entst,at &ig,t ,a*e a &ateria$ ee"t !n t,e state&ents.

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,e as, $! State&ent,e state&ent !' "as, ! dis"$!ses "$ear$y

and indi*idua$$y t,e signi+"ant !#erating 4+nan"ing and in*esting a"ti*ities !' t,e"!any during an a""!unting #eri!d4 gi*ingt,e ana$yst an !*era$$ *ie !' t,e +nan"ia$&anage&ent !' "!any and its #!$i"ies .

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Forecasting

Earning

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Asset #r!du"ti*ity and

earningsir& in*ests "a#ita$ in assets.

And t,ese assets are used y &anage&ent t!

generate re*enue !r in"!&e.ir&s stri*e in su", a ay s! as t! #r!*ides,are,!$ders est #!ssi$e return #er ru#eein*ested.

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EBI< Earning e'!re interest and ta-es.

EB< Earning e'!re ta-es

EA< Earnings a'ter ta-EPS< Earnings #er s,are

PS< i*idend #er s,are

Return !n assetsreater return !n assets ,ig,er t,e &ar/et *a$ue !' +r&?.

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et +nan"ing and

earningPr!du"ti*ity !' 'und is "a$$ed return !n assets.

!st !' !rr!ed "a#ita$ 'und is "a$$ed

ee"ti*e rate !' interest.Ee"ti*e interest rate

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!re"ast n!t !n$y t,e E-#e"ted Return uta$s! t,e E-#e"ted Ris/ !' an in*est&ent.,ere are 3 &!dern te",niues !' Ana$ysis:

Regressi!n Ana$ysis rend Ana$ysis e"isi!n ree Ana$ysis

A##r!a",es t! St!"/ %a$uati!n P =E rati! &!de$s i*idend is"!unt M!de$

Applied Valuations

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Regression Analysis

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rend Ana$ysis !' a i&e Series uti$ies regressi!nana$ysis.

ierentiati!n eteen rend Ana$ysis @ Regressi!n

Ana$ysis

TREND ANALYSS

E-a&ine e,a*i!r !' e"!n!&i" series !*er a #eri!d !'ti&e i.e. !ne rea$ *aria$e ,i", is eingregressed !*er a #eri!d !' years

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L"DE T#AT C!M$ANY ANALYSS S MANLY NECESSAT! T#E NVEST!R! %ANTS T! NVEST N T#AT $ARTC"LAR C!M$ANY&

C!NCL"S!N'

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T#AN( Y!"