Sir,any way track all commodity price for free
Noticed something weird in this Qtr results of Jagran that i couldnāt understand. Can anyone help me understand what does highlighted term means?
If a company buys another company, many times they pay more than the sum of all assets if assets were stripped and sold individually
That part which is overpaid is called goodwill. Goodwill is apportioned over the expected life as well as constantly at every year end checked for impairment
The highlighted entry is for that apportionment
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In the cash flow statementā¦
Under Cash flow from operations, there is a line item of Finance costā¦
Under Cash flow from financing also there is a line item of finance costā¦
Shouldnt both of these figures be the same ? - reflecting the interest payment of the debt taken ?
If they are different, what does it mean ? what can be the reasons why they are different.
Under Cash flow from operations, there is a line item of Finance costā¦
Represents, accrued/booked amount for the Interest bearing liabilities.
Under Cash flow from financing also there is a line item of finance costā¦
Represents, actual paid amount.
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Hi,
I have a basic question. In his annual letters buffett said that, cash flow measure that is our owner earnings is of no use when it comes to businesses like manufacturing, real estate, construction, infra, utilities, etc. because their maintenance capex part is so huge and they can defer those maintenance capexā¦
So how one calculate the value of these companies? In some books they said EV/EBITDA is good measureā¦but again as Buffett said and it does make sake that, not considering main. capex is good way to get drowned.
One way what I thought to value utilities is, calculating how much they earn after all for every unit of energy they soldā¦and how much energy they can produce and sell in future. Given their current investments and projects in pipeline. Am I lil correct here?
Coj we cannot even calculate their returns on assets or invested capital, as these companies need heavy upfront capital.
So how can we value them? If possible please help Mr. Ishmohit, I am just not able to find answer to this topic, its been months.
Hi to all the veterans, I have a small query. We have seen the government has been pushing for a lot of indigenous manufacturing across sectors and have introduced PLI schemes (which to my understanding are subsidies for production of certain products) across sectors. And a lot of investment thesisā have been built around PLI scheme and government infrastructure/railway projects
My question is, is it a good investment strategy to have companies taken because the thesis is - they would be beneficiaries of such PLI schemes? What happens if the subsidies stop or the subsidies proposed by government is actually not fulfilled by them?
And my other question is, what if the government changes in 2024? What happens to the railway or infra plays?
Are companies in stock market agnostic to government policies and government?
It might be my bias on social issues which freaks me out on the idea of change in government but if government changes will it impact Indiaās corporates as well?
As per my understanding, companies like HBL Power, Dixon, Greaves Cotton, PG Electroplast, Borosil Renewable to name a few fall under this category.
Iām taking the liberty to answer and Iām aware the question was not for everyone, just Ismohit
I think you misunderstand Buffet here
If you were to start say a brick building business.
You would pay 10 lakhs for machine and every year you would make 2 lakhs profit.
You collect these 2 lakhs and keep in your business
Anyone wanting to buy your business in year 3, can see that after your costs you have 6 lakhs. Maybe a bit less because maybe a customer didnāt pay you. So letās say you have 5 lakhs
Buffet is saying in the text you copied that for a construction business because they have to constantly keep a land bank and machinery, their books wonāt show this cash.
In the example I gave you, if at year 3 you decide to invest in one additional machine, you will show minus 5 lakhs if new machinery is 10L
If you have an imaginative mind, you will instantly realise how you can game this system.
I wonāt go into gaming the system but Buffet measures cash generated and makes other allowances for businesses where it is difficult to measure.
Once you understand where most of the manipulation occurs in company financials, your job as investor is a bit easier as then you only have to find companies which have a genuine growth prospect
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That is exactly where I am getting messed up, due to the investments which do have very long life will show negative income.
And if possible, please explain, how one has to think about those allowances? Yes, we have to understand the business in and out for that figure, for simplification we take that amount as fixed cost right?
Traditional formula created by bruce greenwald for maint capex, wont work here. So yeah, I guess only after quite deep understanding we will be able to calculate those allowances.
My suggestion would be to read the threads of such companies which exist in VP, read them in their entirety.
Some businesses in themselves need more capital, owning to the industry they are in, and as such those aspects are discussed in the threads by many members. And sometimes there are members, who by themselves could be businessmen, even if not, look at businesses from capex and capacity perspective, and have a deeper understanding of what actually happens on the ground.
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Thank you for the suggestion brother!
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Your point is valid, I donāt think it is a good idea to invest solely based on government policies such as PLI schemes. Not only that the government can change, but the policies can change even without a change in government. Note the recent announcement about cut in EV subsidies. So, if you think a project is viable solely because of government subsidies, it is best to stay away from such opportunities. That said, there is no harm in trying to bet on one or two such opportunities while keeping a diversified portfolio, so that in the event of an adverse development, you donāt lose your shirt.
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Hi all,
Any other way of knowing TAN numbers of firms? I tried the below site however not able to find for TCS and IDFC. Any reason why TAN is not easily available on company sites?
e-Filing Home Page, Income Tax Department, Government of India
Thanks!
What is the purpose?
You can find the TAN of Deductor for your PAN number from the 26AS document.
Needed to file Tax returns for my parents. TDS which has been deducted needs to be refunded. Neither 26AS nor AIS statement capture all information correctly. I find a few dividends which are missed in both.
I donāt remember having experienced this.
Then I guess you can write to the respective companies disclosing the necessary information and ask for their TAN. You can also check previous yearsā documents if they had the TAN you need, assuming TAN does not change and is permanent.
Hello everyone!
I want to understand the portfolio turnover ratio a little better with respect to how it should be calculated. Now obviously the objective of the ratio for a certain period (usually measured annually) is to assess how often the manager/investor trades (buys and/or sells) the securities in their portfolio. A quick hit on the internet gives out the formula as minimum(Total buys, Total sells)/Average portfolio value. My questions here are two-fold. Logically speaking,
- Shouldnāt the numerator be an addition of total buys and sells?
- How are we accounting for cash inflows and outflows from the portfolio in the year?
It would be great to see if the readers here have modified this ratio in some way to suit their needs or prefer using something else entirely to measure the trading within a period.
Thanks for reading, would appreciate any help in understanding this better!
Good question, and at first, I was also flummoxed by this formula. Had never checked, really. But on further thought, the reason for taking minimum of the two is obvious. Let us say a fund gets a lot of inflows, and buys a lot of stocks. Sells nothing. How much should the portfolio turnover be? Zero, right? We want to measure churn, and this is not churn. Or take the reverse case ā a fund is facing redemptions, sells stock, buys nothing. What is the churn? Zero again. Minimum of the two is the actual churn.
I think it is ignored, but I am not fully sure.
Never felt the need to calculate the ratio.
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First off thank you for the lucid explanation, it helped a lot and I think I get the intuitional idea behind it now.
The formula takes minimum of the two because the idea is to identify the replaced securities in that period. The difference between the total buys and total sells is actually the cash inflow/outflow into/from the fund. Adding up the total buys and sells is actually leading to double counting of the actual value of the replaced securities within the fund. Replacement is essentially selling asset(s) and buying another or vice-versa of equal value, any buying/selling over this value is actually cash inflow/outflow.
So the formula doesnāt include cash inflow/outflow in the calculation, if it did, turnover ratio for newly established funds would be 100% or more, which its not as you rightly pointed out.
And lastly I am planning to keep an eye out on this ratio (or some other form of it), since turnover comes with costs, which itself end up compounding in long term.
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- If a company has inventory gains, will those gains be reported in P&L by increasing sales or decreasing COGS?
- Does the same line item is used to report inventory losses also?