Finally here’s the original cowboy Yogesh Sane’s (@Yogesh_s) excellent post on extensive use of Charts - A story of a Company in 40 Charts. He has explained beautifully how he uses these charts. Selected excerpt, to kindle your interest!
This screen lets me quickly check how the sales have grown over the years, if the sales growth has trickled down to gross profit, operating profit and net profit, how the book value has grown, if the debt is growing, how has the cashflow kept up with cash profits or has the receivables and inventory ate up all the profits. Cashflow analysis help me analyze if the company is able to fund it capex with CFO or it had to go external funding. DuPont analysis quickly gives an idea how efficiently company has utilized its capital and if the high ROE is a result of higher leverage or higher ROA. I can also check if there any structural change in its asset turnover vs operating margin trade-off. Finally, the market cap chart (on the bottom right corner) shows how market has responded to the developing story.
If a picture is worth thousand words, a chart is worth thousand numbers. 40 charts on this screen tell the story of a company as it unfolded over the last decade. It literally takes me just a few seconds to reject a bad company. I cycle through all the companies in the database either by alphabetical order or by market cap. Sometimes, I end up rejecting few good ones too, but I am OK with that. Within 2 to 3 weeks I am able to scan all the companies in my database. I go thorough this exercise at least once a year.