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N Sivasankaran

Articles By N Sivasankaran

18 Articles

Your Money: What cash conversion cycle says about a firm

Cash conversion cycle reveals the days payables adjusted days in getting back the cash that goes out in the operations of a firm

India’s particularly disastrous Covid-19 second wave-exposed the weakness of the public healthcare system.

Your Money: Track operating cycle to know a firm’s efficiency

Lower the operating cycle of a firm, better is its working capital efficiency

Operating Cycle (OC) is a tool that helps firms avoid such trouble. Let us look at the computation of OC along with its inference rule.

Your Money: How to compute working capital for target firms

Compute non-cash working capital for past five years to understand the trend and use it to predict its future course

Working capital is defined as the excess of total current assets over the total current liabilities of a firm. For ST, it is Rs 200 crore. As a percentage of total assets, WC for ST is 28.57% and it is 20% of sales.

Your Money: Check solvency position using debt-to-equity ratio

It is best to consider debt to be the sum of both long-term and short-term lease obligations & borrowings

If its previous year figure was 0.56 times, then the firm has fallen in its solvency position in the current year.

Your Money: Know the five characteristics of a stable firm

Risk-avoiding investors looking for stable and regular returns may pick up their choice of stocks using the stable firm test

The growth rate for AM is lower compared to the long run expected growth rate for India.

Your Queries: Know what investment utilisation ratios say about a firm

Fixed Assets Turnover is computed by dividing the revenue of a firm by its tangible fixed assets.

Your Money: Use Altman Z score to sniff out bankruptcy potential

If the Z score is less than 1.81, the firm is a bankruptcy candidate

arnings Before Interest & Tax (EBIT) 3,500; total assets 14,000; working capital 5,000; Retained earnings 7,000; sales revenue 10,000; book value of debt 3,000; market capitalisation 50,000.

Your Money: How to use excess returns as an investment filter

A firm with excess return for its debt and equity investors is efficient in managing its explicit and implicit profitability

Excess Return of DS is 24.99% (= ROE of 40% less COE of 15.01%).

Your Money: What retention & reinvestment rates say about a firm

Higher reinvestment rate reflects higher growth rate in earnings for shareholders

Growth rate in net income is one of the significant fundamental variables determining the value of a stock.

Your Money: How to evaluate cash flow management efficiency

A firm should have positive figure for cash from operations to attract the attention of investors

Your Money: Relation between return on capital and return on equity

A firm should earn an ROE which is higher than its ROC to make its stock worth buying

While assessing the economic attractiveness of a target stock, young equity investors must ensure that the target firm earns an ROE which is higher than that of its ROC.

Your Money: What profit before and after tax tells about a firm

PBT & PAT are the line items of interest for equity investors to assess the attractiveness of the stocks

Total revenue is the sum of operating revenue and other income and is Rs 3,000 crore for HL.

Your Money: What EBITDA and EBIT tell about a firm’s performance

We need to know the application of EBITDA & EBIT to arrive at a correct valuation of firms

The operating revenue for TL is Rs 1,500 crore.

Your Money: What gross profit margin tells about a firm

Higher the gross profit margin, better the firm’s efficiency in managing its production expenses

Let us look at the computation of gross profit margin and its uses.

Your Money: Know the determinants of growth rate?

Growth rate is an important input in the processes of valuing a stock

The fundamental growth rate in EPS is the output obtained by multiplying the return on equity (ROE) with the retention rate.

Know how to use Piotroski’s F score for investments

Piotroski’s F score looks at profitability, leverage liquidity and source of funding, and operating efficiency

Financial Planning: 6 tips from the IPL season to win the wealth game

The ongoing cricket tournament has lessons for young investors on making every rupee count

Financial Planning, IPL season, investment rules, wealth game, Cricket, IPL 2019 season,  investments tips

A trust in the name of the People’s President

We must create a fund in APJ Abdul Kalam’s name and use the money earned for economic and social growth

A trust in the name of the People’s President
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