How to read a business through its statements and ratios. Expand a ratio and change the numbers — the calculator updates live. Framework, never a recommendation.
The three statements every analyst learns to read together.
A snapshot of what a company owns (assets) and owes (liabilities) plus shareholders' equity, at a point in time. The core identity is Assets = Liabilities + Equity.
Educational explanation only — not a signal, recommendation, target or stop loss.
Revenue minus expenses over a period, ending in net profit. It shows whether the business is profitable and how its margins evolve over time.
Educational explanation only — not a signal, recommendation, target or stop loss.
Tracks actual cash from operating, investing and financing activities — often more revealing than accounting profit, since cash is harder to massage.
Educational explanation only — not a signal, recommendation, target or stop loss.
The fine print: accounting policies, contingent liabilities and related-party deals — where much of the real story is often hidden.
Educational explanation only — not a signal, recommendation, target or stop loss.
How to navigate the management discussion, auditor's report and segment data to actually understand a business beyond the headline numbers.
Educational explanation only — not a signal, recommendation, target or stop loss.
Numbers that compress profitability, efficiency, leverage and valuation. Expand any ratio and edit the inputs — it recalculates live.
Net Profit ÷ Shareholder Equity — the profit generated per rupee of owners' capital. It is best understood through the DuPont breakdown: net margin × asset turnover × leverage.
DuPont decomposition:
Educational explanation only — not a signal, recommendation, target or stop loss.
EBIT ÷ Capital Employed. It measures returns on all capital (debt + equity), useful for comparing capital-intensive businesses on a level field.
Educational explanation only — not a signal, recommendation, target or stop loss.
Price ÷ Earnings per share — the rupees paid per rupee of annual profit. It is a relative gauge, meaningful only versus peers and the company's own history.
Educational explanation only — not a signal, recommendation, target or stop loss.
Price ÷ Book Value per share. Common for banks and asset-heavy businesses where book value is meaningful.
Educational explanation only — not a signal, recommendation, target or stop loss.
PE ÷ earnings growth rate — it puts the PE 'in context' of growth, so a high PE may look less extreme once growth is considered.
Educational explanation only — not a signal, recommendation, target or stop loss.
Total debt ÷ equity — a leverage and solvency gauge. Higher values describe higher financial risk and bigger interest obligations.
Educational explanation only — not a signal, recommendation, target or stop loss.
Current Assets ÷ Current Liabilities — a short-term liquidity check on whether near-term obligations are comfortably covered.
Educational explanation only — not a signal, recommendation, target or stop loss.
EBIT ÷ Interest expense — how comfortably operating profit covers interest. Low coverage is a classic stress signal.
Educational explanation only — not a signal, recommendation, target or stop loss.
Operating profit ÷ Revenue — core profitability before financing and tax, and a gauge of pricing power and cost control.
Educational explanation only — not a signal, recommendation, target or stop loss.
Frameworks for thinking about what a business may be worth.
Discounted Cash Flow values a business as the present value of its future free cash flows. It is highly sensitive to the growth and discount-rate assumptions you feed it.
Educational explanation only — not a signal, recommendation, target or stop loss.
Valuing via multiples (PE, EV/EBITDA) against comparable companies rather than absolute cash flows — quick, but only as good as the peer set.
Educational explanation only — not a signal, recommendation, target or stop loss.
A durable competitive advantage — brand, network effects, cost edge or switching costs — that protects a company's returns over time.
Educational explanation only — not a signal, recommendation, target or stop loss.
An estimate of what a business is 'really' worth, independent of its current market price — the anchor of value investing.
Educational explanation only — not a signal, recommendation, target or stop loss.
The buffer between an estimate of value and the price paid, meant to absorb error and bad luck. A risk idea, not a price target.
Educational explanation only — not a signal, recommendation, target or stop loss.
The non-numeric judgement that surrounds the numbers.
Understanding the structure, cyclicality and competitive forces (e.g. Porter's Five Forces) that shape a whole group of companies.
Educational explanation only — not a signal, recommendation, target or stop loss.
How the company actually makes money — its products, customers, pricing power and unit economics.
Educational explanation only — not a signal, recommendation, target or stop loss.
Assessing the leadership's capital-allocation track record, compensation and candour with shareholders.
Educational explanation only — not a signal, recommendation, target or stop loss.
Board independence, promoter pledging, related-party transactions and audit quality — the guardrails on how a company is run.
Educational explanation only — not a signal, recommendation, target or stop loss.
These are academic explanations and generic calculators that compute ratios from numbers you enter — not valuation opinions, recommendations or target prices for any security. We are not SEBI registered investment advisers or research analysts. Consult a SEBI registered professional before investing.