Business Analysis

Profits are clustered. ps: (Read More on ROE here - https://www.finnacleshahclasses.com/forum/business-analysis-series/blog-112-primer-on-roe-ek-number-saa-insan-ko-hin-bana-deta-hai-nana-patekar  ) All businesses are not equal, some are tremendously profitable and some businesses perpetually make low returns. As you might have heard the famous quote from Mr. Charlie Munger in which he says “Fish Where the Fish are” which simply means Invest where the profits/Cash Flows are.

In this Post our focus will be on understanding the issues with extracting right estimates of historical Industry sizes & growth. As an analyst needs to take a judgement of future opportunity size while he analyzes a business it becomes extremely important than first to get the right estimates of current & historical industry size and past growth rates. Sounds so simple right open an Annual report - management would have served industry size data on a platter to you. It's a b

If you are given a particular Industry/company to cover what you will do? How are you going to start? What are the things you’ll have to cover to understand the basics of the same? Here are the steps you need to follow to get a quick glimpse of any Industry: Note: Just to be very clear this is NOT called Industry Analysis/company analysis. Please note this is just First step of Analysis i.e. having a brief idea about the industry/company. Step 1. Language of the Sector/busine

As a business analyst its extremely crucial to understand the opportunity size/target Addressable market that's available in front of a company to grow. Everyone wants a big and growing market. Although this term is used directly in the start up space the listed market professional use it in a different way i.e. long runway of growth which simply means company's potential to achieve higher revenues should not get saturated quickly. The companies which are smaller in size, run

In part 2 we understood that a increase in penetration levels, per capita consumptions, organized market share, industry size to GDP % can lead to great growth in an industry and for companies operating within that industry. Let us again present some of the current penetration levels, Organized Vs Unorganized Market, expansion of target market, Industry as a % of GDP etc. in some product categories in India These data point were presented in a brilliant presentation by Oaklan

Well it's technically true that "Risk hai to Ishq Hai" but it's also true that "Kaisa hai yeh ishq hai Ajaab sa risk hai". It's one of the most important job of a business analyst and an entrepreneur to understand what all can go wrong in a business and what's the probability of that event happening. The one way street of only thinking about growths in revenue & profit without understanding the downside a business faces has more often than not resulted in very unpleasant outc

After selecting an Industry or company the first step you need to do is build your sector repository as this will help you for your research. You can’t randomly open any document and start reading. You need to have a clear idea what you are reading and along with this you need to have a clear idea that in what document you get what kind of information. In this particular blogspot we would be discussing a list of resources you need to download and start your research process.

In this blogpost we will discuss various angles through which we can derive the potential industry size and understand the runway available for growth of a business within an industry. First thing first - We should never comment "This company has already grown so much/its market cap has already increased by 5/10 times etc. Hence, now it's not possible to grow further." Let us share some excellent excerpts from a newsletter published by Marcellus Investment Managers. " Some of

After selecting an Industry or company the first step you need to do is build your sector repository as this will help you for your research. You can’t randomly open any document and start reading. You need to have a clear idea what you are reading and along with this you need to have a clear idea that in what document you get what kind of information. In this particular blogspot we would be discussing a list of resources you need to download and start your research process.

1. Area of operation: commercial vs residential vs lease model-Affects Revenue cyclicality & margins 2. Reputation in local brokers-Affects Project Booking Advances & Cash flows 3. Target market: Tier 1 city vs tier 2/3 cities, premium projects vs middle/low income vs retirement projects vs clubs/resorts. Impacts: Revenue cyclicality & Unit economics of the business 4. Check RERA for timely project completion: Affects pricing & Bookings Advances 5. Low ready to move (RTM) inv

While watching the great COSMOS series brilliantly narrated by @neiltyson  this clicked us somewhere around the 12th episode of season 1. This set of observations might help you understand what great investors and thinkers like sir charlie munger globally and Prof Sanjay Bakshi in India have been explaining for decades – the importance of multi-disciplinary thinking. Observation 1: It takes much longer than you think Earth is approximately 5 billion years old & the universe i

We all have heard “glass half full, half empty” mindset stories. Recently, something similar happened with the Steel Authority of India (SAIL) valuations. Before that, let’s understand how the business cycle affects valuations. There are two ways to see the value of a company. The market cap of the company indicates the value of common shares, whereas enterprise value indicates the value of the entire company. Market cap = number of outstanding shares * current market price E

The only rule in investing is there's no permanent rule. Reading this you will truly understand why investing is simple but not easy. 1) Crunching basic number like revenue CAGR and ROCEs is just the start not the END of business analysis. (a) Pick up any decade all businesses that generated strong returns ratios a decade ago (2002-2012) did NOT result in superior stock returns a decade later (2012-2022). (b) There will be businesses that delivered superior investment returns

In this Post our focus will be on understanding the issues with extracting right estimates of historical Industry sizes & growth. As an analyst needs to take a judgement of future opportunity size while he analyzes a business it becomes extremely important than first to get the right estimates of current & historical industry size and past growth rates. Sounds so simple right open an Annual report - management would have served industry size data on a platter to you. It's a b