Investing Basics - Feel free to ask the most basic questions

i have a home loan OD account with SBI and i always park my excess funds there.
So, effectively, interest is only charged on the remaining balance of the homeloan.
Money saved = Money earned :wink:
i feel so far this is the best method to use my liquidity and save EMI outgo.

You can also look at liquid ETF, although i am not sure of its returns lately.

For 2 months, why not let it remain in the savings fund instead? In that way you can quickly transfer it to your Trading account.

Anyway, for that short period, I feel overnight funds are best suited. You can choose HDFC, ICICI, Kotak or SBI’s (with high AUMs).

If it is just for 2 months, how much more would you gain in 2 months with liquid funds than with a savings account? If the difference to you substantial, then you can go with it. Also, credit risk always exists even for liquid funds, the NAV will fall, although it will regain fast compared to other debt funds, liquid fund of Taurus fell and investors lost money. Then there is redemption, there a few funds which offer instant redemption, but I think it is up to a certain amount and there could be redemption pressure if many redeem at a time. Then there is STCG.

If you want to invest, then check for the highest AUM funds, so that they don’t invest much in 1 bond, and also the redemption will be fast, check if you can redeem as much as you want instantly. Invest in AAA rated bond funds.

Hi, can anyone point me how to calculate intrinsic value of a company with an example? I tried to find it online. But it seems complicated. So any help or pointer will be appreciated. If it has already been discussed in any other thread, please point me to that.

These are a few Valuation related threads in VP:

If you’d like a complete learning solution, I suggest you take a look at the following:

http://people.stern.nyu.edu/adamodar/New_Home_Page/webcasteqspr19.htm?utm_source=quora&utm_medium=referral

(Prof. Aswath Damodaran’s Spring 2019 Valuation classes at NYU Stern, put up online for everyone to see and use–for FREE)

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Thanks Dinesh. I will go through prof Aswath video first to understand the concept as I am not from finance background. So I might not be able to use excel directly without knowing the concept.

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If an individual or a fund owns <1‰ of the company say .46‰, will it show up on the BSE shareholding data( public)? I ask because I have seen such shareholders with values less than 1‰… if thats true then why do I hear that a fund shows up on bse only when it holds =>1‰?

Show an example where it is less than 1 %, then it will be easier to understand your question. Normally the limit for mandatory disclosure is 1 %.

Refer above attached screenshot for wonderla Dec 2018 shareholding report as a sample… now my question is…would the mutual funds and foriegn portfolio still show up on this report if their respective holdings were less than 1%?
I can see that the NRI non repatriable is .29‰

This question is important because lets say you are tracking foreign funds buying your stock but they will not appear on shareholding data untill they are 1% of the company… so you will have to rely on other mechanisms like block deals bulk deals etc to understand who is buying your company

My answer is No, they wont show up. If you see, 10 MFs hold is 5.71 % but only 2 are listed specifically. So the others hold less than 1 %.

This is a category and not individual holding. There are 288 investors who jointly hold this much.

1 % disclosure is for an single investor and not category.

Hope this answers the question.

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Brilliant explanation. Thank you. Finally all my doubts are clarified.

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Hello all how does comparing debtor days of companies from same sector help?does it shows any thing about quality of company product or management?

It shows the pricing power with suppliers. A better metric to look at would be the broader Cash Conversion Cycle, which looks at the whole chain (Suppliers, Distributors and/or Customers).

Great companies often have a negative or extremely low Cash Conversion Cycle. But like most things, it is all relative. If the industry average CCC is 12 weeks and a company can do it in 4 weeks, then its way better in terms on converting Revenues to Cash for the Stakeholders.

http://www.ratestar.in/ shows Receivable Days, Inventory Days, Payable Days and CCC all in one place.

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How does credit ratings report helps investors in knowing quality of management business and longevity of growth

Continuing the discussion from here as it is digressing from original topic
http://forum.valuepickr.com/t/the-art-of-valuation/505/233

@dineshssairam , can’t thank you enough for taking the time out to help with our queries.
I have almost zero knowledge when it comes to corporate finance. Trying to learn a few things from fellow boarders.
I tried calculating the ROCE for LTTS, as that is one of the companies, Im tracking currently. I had some questions on the same. Would be very helpful if you can clarify

  1. Other income was significantly high this year. It includes forex gain, dividend income from mutual fund investments and income from some export licences. Should this be excluded from EBIT? Screener includes it though and ROCE according to Screener is 38% .

  2. Working capital calculation:

WC = Non cash current assets - non debt current liabilities

Here is a screenshot of the current assets:

Other financial assets and other current assets have multiple components and depending on what is included and what is excluded, the ROCE varies a lot.

I think that ‘financial assets- others’ must be included entirely and ‘other current assets’ except the service tax and GST components must be included in working capital calculation. Am I correct?

Coming to the current liabilities,

Among other financial liabilities and other current liabilities, I think except unclaimed dividend which is not much ,everything else should be included. Is this the right way to go about it?

  1. Coming to the liquid cash in denominator - this must include all the cash and liquid investments(like FD, MF etc) both current and non current. correct?

Sorry for the long post…

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Check these vidoes:
https://www.safalniveshak.com/read-financial-statements-1/
https://www.safalniveshak.com/analyze-balance-sheet-1/
https://www.safalniveshak.com/analyze-balance-sheet-2/

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I would personally exclude non-business income from Operating Income/EBIT. So in this case, yes, Dividends from Mutual Funds / Forex Gains would be excluded. Income from Export Licences, not so sure. Check some previous ARs. If this item is there, it could actually be a recurring business activity.

Both Other Financial Assets and Other Current Assets look like business capital (Working Capital). I would include them in the calculation. Again, the key here is the recurrence. If they sound like business activities and they have been recurring in the last few ARs, then they’re definitely Working Capital.

Unclaimed Dividend isn’t a usual business activity. I wouldn’t bother including it in the calculations. But yes, everything else looks like a regular business activity.

No. You shouldn’t include any item from Non-current Assets. Long lived Assets aren’t ‘liquid’ by nature. From Current Assets, you may include ‘Cash and Cash Equivalents’, ‘Other Bank Balances’ and ‘Investments’.

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Thanks @dineshssairam for your help. I finally got the ROCE for LTTS to be 28% which is quite good.

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Does anyone know of a site which shows all time high price and low price of a stock…not the usually 52wH/l which is available in more sites

@Mahendra243

Can this not be obtained from the graph showing prices of a stock over the maximum range? Such a graph is available on most sites, including Screener. One just needs to select the price range as “Max”. This is what I usually do.

Does this help?

Sandeep

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