Screener filters to filter financially sound companies

Q&A: Questions & Answers Investing Basics Q&A
1

Hello Members,

Wanted to understand how can we set filters in screener.in to filter financially sound companies. Which all financial parameters to be involved? How to know whether cash flows are sustainable? How to determine whether the balance sheet is healthy or not?

Few of the ratios that I can think of are:
Interest coverage ratio
Piotroski score
Altman score
ROE

(Note: I have filled this post under Q&A: Investing for basics/newbies so as to not to crowd with other posts)

2 Likes
2

You can add

ROCE
EPS
PE and Industry PE
PEG ratio
net cash flow

This is what I am doing.

3

Thanks for your reply. But the ratios listed by you are more of profitability/efficiency and valuation ratios rather than the indicators of health of the company.

4

Basically to filter out growing companies which are in a good financial position I use the below filters

Debt to equity (Less than 0.5 preferred more)
Sales growth 10Years > 10%
Net Cash flow
Return on equity
Average return on capital employed 10Years

5

I use the following : (Just copy and paste in the Screener and later modify it as per requirement )

Price to Earning < Industry PE
AND
Return on equity > 12
AND
Return on capital employed > 12
AND
EPS > EPS preceding year
AND
Dividend yield > 1
AND
Promoter holding > 70
AND
Current price < Intrinsic Value
AND
Debt to equity < 0.1

Hope it helps !

2 Likes
6

Thanks abhishek, I didnt knew about Industry PE and Intrinsic Value in Screener. Any idea how these values are derived at?

7

Intrinsic Value is inbuilt so I don’t know exactly but I have run DCF Valuations on a few and the value comes close to it.

Hope it adds value !

8

Thanks abhishek. I am use Trendlyne as core screener and screener as standby. Trendlyne doesnt have such Industry PE and Intrinsic Value parameters.