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Grab a popcorn tub for this is going to be a long answer!Firstly, let us understand the importance of ‘Quarterly Results’.The shareholders of the company have put their hard earned money in the company. So, they must know about the affairs of the company. However, they can not have access to the books of accounts of the company. This is because, only and only the management of any company can access the books.Hence, to give a snapshot of company’s financial performance, listed companies are required to publish ‘Quarterly Results’, which are available in public domain.Also, before we start the details, one must have a basic understanding of ‘Financial Year’ and ‘Quarters’.A financial year normally starts from 1st April and ends on 31st March the following year. This is divided into 4 equal periods, each one is a ‘Quarter’, consisting of 3 months.Q-1 is a period from 1st April to 30th June,Q-2 is a period from 1st July to 30th September,Q-3 is a period from 1st October to 31st December,Q-4 is a period from 1st January to 31st March.Also, after 30th September, i.e Q-2, one can get the analysis of half financial year (H-1). So, H-1 is a period from 1st April to 30th September and H-2 is a period from 1st October to 31st March.As per SEBI guidelines, every listed company needs to publish quarterly results in 45 days after the quarter end except the last quarter.To sum up,Please note that it is companies which have a custom of uploading the quarterly results as early as possible are the ones which do not have anything to hide or cook. For instance, the entire earnings season starts with giants like Infosys and TCS.On the other hand, whenever a company delays the quarterly results or postpones them after announcing a date, must trigger caution for an investor. For instance, Yes Bank delayed its quarterly results for the Q-3 of FY 2019–20, which ended on 31st December 2019. It filed the results on March 14, 2020.[1] And we all know of all the major developments that took place before the results.Also, in past there have been companies fined by SEBI for not filing the quarterly results altogether. The names include infamous companies like Gitanjali Gems, Amtek Auto, etc.[2]For the uninitiated, Q-O-Q stands for Quarter on Quarter and Y-O-Y stands for Year on Year.When we compare the numbers of a company on sequential basis, i.e. on Q-O-Q basis, we are comparing Q-2 of current financial year with Q-1 of same financial year. Thus, we would be able to judge the performance of a company and make a conclusion if or not it is performing better this quarter compared to the immediately preceding quarter.On the other hand, in Y-O-Y basis, we are comparing Q-1 of current financial year with Q-1 of last financial year.To sum up,So, which comparison is correct? Q-O-Q or Y-O-Y?The answer depends on the sector to which the company belongs. In case of cyclical stocks or companies which are seasonal, there may be a quarter where the company performs best compared to other quarters. For instance, in case of Auto companies, the ‘Diwali’ quarter is the best one. Hence, comparing the numbers on Y-O-Y basis makes more sense because of a strong second half (H-2). So is the case with Steel, Power and Cement companies, where Y-O-Y comparisons must be done.However, in case of Telecom companies or IT companies, Q-O-Q comparison makes more sense. The reason is the fact that these companies do not have any seasonality.Also, YTD (Year to Date) comparisons are quite useful. YTD helps us in analyzing the performance of the company from the start of the financial year till the date quarter. Hence, the YTD numbers for Q-3 will have numbers from 1st April to 31st December.P.S : The entire year 2020 was an exceptional year due to covid. Hence, in F.Y 2020–21, comparing the numbers on Y-O-Y basis won’t make any sense as the base is too small.Stock price more often than not react to quarterly result of a company. Also, note the below interesting observations :Even if there is increase in profits on Q-O-Q or Y-O-Y basis, the stock can tank because market expectations is an important factor. If the profits are below expectations, the stock will fall.Even if the performance of a company is above expectations of street, the stock may still fall after results. This may be because it people were anticipating good results and the stock already rallied before the results. That’s why the saying : ‘Buy the rumour, sell the news’.Sometimes, even after a bad result, the stock may still rally. This may be because of good management commentary. Do note that it is not mandatory for the companies to give guidance or commentary of their plans.The following aspects are worth comparing when a company announces quarterly results:A. ANALYSIS OF PROFIT AND LOSS ACCOUNTThe topline of company (Gross and Net Sales)Volume (quantity)Price of goods (quality)Operating IncomeEBITDAEBITMarginsThe bottom line of companyNet ProfitNet Profit MarginsEPSB. ANALYSIS OF BALANCE SHEETSources of FundsApplication of fundsC. ANALYSIS OF CASH FLOW STATEMENTInflow of cashOutflow of cashD. COMMENTS OF THE AUDITORE. NOTESIn this post, I will be trying to cover mainly the analysis of profit and loss account.1. Topline of the company :Gross Sales: Gross sales indicates the total sales of the company before discounts and returns from customers. Gross sales shows how the company is performing operationally. It depends onVolume: Which refers to the total number of units sold. Larger number represents good market penetration.Price: Higher price shows that the company is having good command and customer loyalty.Net Sales: Net Sales indicates the sales of company after discounts and returns.2. Operating Income and Net Profit:To understand the entire concept of operating income, let us understand this example in detail.EBITDA or Earnings before interest, tax, depreciation and amortization helps one to understand how the company is going through its regular business activities, i.e. its operations.Please note that in EBITDA numbers, we have not deducted interest on borrowings, depreciation on assets and amortization on intangibles like goodwill. This is because different companies from same sector may have different amounts and dates of buying fixed assets, different finance structures, etc. Hence, EBITDA numbers help one to compare the numbers with peers for understanding the financial performance of the company.EBTDA margin in this case are 60%. It is calculated by dividing EBITDA by Sales. Again this is useful for comparing with peers.EBIT is calculated by subtracting depreciation from EBITDA. Further, one can calculate PBT by deducting interest from EBIT. And finally Net Profit (PAT) is arrived at by deducting tax from PBT.Net Profit helps one to understand the individual performance of a company. This can again be compared on Q-O-Q or Y-O-Y basis as discussed previously. This is nothing but the bottom line of the company.Note: Sometimes company may earn revenue which are not from operations, such as rental income or income from investments. These numbers must be ignored when we focus on operating profits.3. MarginsIn the above case, the net profit margin comes to 35%. It is calculated as Net Profits divided by Sales.Net Profit margin gives an idea of the overall financial position of the company and how well the company has managed to contain the costs. Also, if the net profit margins of a company are fluctuating then investor must look for the reasons such as one off income or expenses.4. EPSEPS is Earnings Per Share. It is calculated as Net Profit of the company divided by the total number of outstanding shares.It helps investor in knowing how much a company earns for every share.Also, if we multiply EPS by PE ratio we get the Market Price per share. For understanding PE ratio, one may refer this post: Apples, Oranges And P/E Ratio.It is important to note that every company has to present audited financial statements only at the end of the financial year.So, for quarterly results, companies can present unaudited financials.However, comments of the auditor if any must be taken and read seriously. An auditor is a professional who bridges the gap between company and the shareholders.If you like what you read, you may follow me on medium. Also, I write long threads on swapnilkabra (@caswapnilkabra) | Twitter.Footnotes[1] Four key things to check when YES Bank announces Q3FY20 results on March 14[2] NSE fines Gitanjali Gems, 23 others for not filing financial results

Employees’ Pension Scheme (EPS)Employees’ Pension Scheme (EPS) of 1995 offers pension on disablement, widow pension, and pension for nominees. EPS program replaced the Family Pension Scheme (FPS) of 1971. When an employee joins an establishment covered under the Employees Provident Funds & Miscellaneous Provision Act, 1952 (s)he becomes a member of Employees Provident Fund Scheme (EPF), Employees’ Pension Scheme (EPS) 1995, Employees Deposit Linked Insurance Scheme (EDLIS ) , 1976 . The EPS act in pdf format can be read at EPFO’s EPS webpage or Employees’ Pension Scheme, 1995 (pdf) and FAQ on EPS at EPF webpage. It’s main features are:It is financed by diverting 8.33% of employer’s monthly contribution from the EPF. Monthly contribution to EPS is restricted to 8.33% of 6500 or Rs 541 p.m and after Oct 2014 Rs 1250 8.33% of 15,000. Government’s contribution of 1.16% of the worker’s monthly wages if salary less than Rs 6,500.Unlike the EPF contribution EPS part (8.33% out of 12% contribution from your employer or Rs 541 and after Oct 2014 Rs 1250 what ever is minimum) does NOT get any interest.The fraction of service for six months or more shall be treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded upto 10 years.Lifelong pension is available to the member and upon his death members of the family are entitled for the pension.A employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58/50 years.No pension is payable before the age of 50 years.Early pension can be claimed after 50 years but before the age of 58 years. But it is subject to discounting factor @ 4% (w.e.f. 26.09.2008) for every year falling short of 58 years. In case of death / disablement, the above restrictions doesn’t apply.The maximum Pension per month is subject to maximum of Rs 3,250 per month.Maximum service for the calculation of service is 35 years.No pensioner can receive more than one EPF Pension.Earlier there was a provision under EPS allowing commuting of one third of monthly pension by paying 100 times the original monthly pension. However, the amended scheme from 26 Sep’ 2008 doesn’t allow it anymore.Table below gives the rates of contribution of EPF, EPS, EDLI, Admin charges in India.The purpose of the scheme is to provide pension in following situations:Note: As per Updated document of EPS on 2008 eligible period of service has be changed to 10 years from 20 years. Hence Short service Pension which was Member has to render eligible service of 10 years and more but less than 20 years is no longer valid.Calculation of PensionFor a member who joined EPF before 15.11.1995 have 3 components in Pension calculation:(a)Past Service Benefit (b)Pensionable Service Benefit (c)Proportionate ReductionPast Service : means the period of service rendered by an existing member from the date of joining Employees’ Family Pension of 1971 till the 15th November, 1995.Pensionable service means period of service rendered from 16 Nov 1995.Proportionate reduction: if the past service is less than 24 years and past service benefit + Pensionable service pension is less than Rs.500.For those who joined after 15.11.1995 only Pensionable Service Benefit is applicablePension depends on your contribution to Pension Fund and your service. You may be drawing very high salary, but your contribution to Pension Fund will be only Rs. 541 and and after Oct 2014 Rs 1250 max. This is because, as per EPF scheme, employer has to remit 8.33% of actual salary or of Rs. 6500 or 15,000 whichever is minimum. If your contribution in terms of amount or number of years is less, your pension will be less. . Your company can contribute more with permission. EPF Goa has details on how to get more pension.Note: If no wage is earned for a certain period, that period is to be deducted from the service (as there will be no contribution to Pension Fund). Maximum pension is calculated as followsMr R.Kapoor started his job on 15th Nov 1995. He works for 35 years. His average salary=20,000/- per month but for pension service maximum salary considered is Rs 6,500. So Mr. Kapoor’s pension from 16.11.2025 will beRs (6500 X 35)/70 = Rs 3250/month.You may calculate your possible approx. pension amount by using Approximate Pension Calculator.WithdrawalIf total service of employee is less than 9.5 years, (s)he is not entitled for pension so he can apply for Withdrawal benefit i,e Pension Fund Money back. Once, the service period crosses 10 years, the money withdrawal option ceases you can only get Scheme Certificate which (s)he can use to get pension from the age of 50 years.Scheme CertificateIf total service of employee is more than 9.5 years and age of employee is less than 50 years of age, (s)he can only claim scheme certificate. (S)He can add services at different companies to calculate total service. (S)he can get pension from the age of 50 years on wards. If (s)he has scheme certificate for all services, he may apply directly at EPF which covers the area where bank (SBI, Canara,Syndicate,) is situated. He needs to fill Form 10-D, get form attested by that bank manager with photo and other required documents which is mentioned in the Form-10D itself.Withdrawal – Money backIf total service of employee is less than 9.5 years and age of employee is less than 50 years of age then only one can withdraw the EPS amount in cash. But unlike EPF which when you withdraw you always get 100% of your EPF part, for EPS withdrawal amount depends on depends on Average salary and total service, NOT related to actual Balance in Pension Fund. The withdrawal amount is governed by what is called Table ‘D’.Note that the table D is upto 9 yrs only, because if 10 yrs are crossed, then you are liable for pension.So if Ms. Priya Sharma’s monthly salary is Rs 40,000 per month but for purpose of pension only Rs 1250(earlier 541) p.m or Rs (15,000 earlier 6,500) annually is considered. If she withdraws after 3 years her annual pension will be= Proportion corresponding to 3 years of service from Table D * 6500= 3.10 * 6500 / 3.10 * 1250Claiming PensionFor pension, withdrawal benefit, scheme certificate etc. application should be through ex-employer. For pension, Form 10D(pdf format) is to be used. For withdrawal benefit & scheme certificate fill Form 10 C(pdf format) which is also available with the HR departmentIf you have scheme certificate for all of your service, you may apply directly at EPF which covers the area where your bank (SBI,Canara,Syndicate,….) is situated after attesting the filled up Form-10D by that bank manager with photo and other required documents which is mentioned in the Form-10D itself.FAQFrequently Asked Questions we came across.Q: I worked in a company for exactly 1 year(12 months) My Basic salary was 1,20,600 and deduction for PF from my salary was 1206 P/M. As I know equal deduction should be include by the employer. However I was told at the time of joining that the deduction of employer will also be deduct from your salary and It will be not displayed in your salary slip.The PF amount I received against the EPF A/C is 21518+6630=28148 i.e however less then the actual amount credited as a pf contribution including both employee and employer that should be 28948.Ans : Total amount in EPF will be your contribution (A), Employer’s contribution (B) and interest. In your case basic salary of Rs.1206/per month, PF and EPS contribution will as follows:A) Your 12 months PF contribution will be – Rs. 14472 (i.e. 1206 X 12)B) Employer’s 12 months PF contribution will be – Rs. 7980 (i.e. 665 X 12)C) Employer’s 12 months EPS contribution will be – Rs. 6492 (i.e. 541 X 12) or 15,000 (i.e 1250 *12) after Oct 2014In my opinion your credited EPS amount of Rs.6630 is correct, if your service is exact 1 year (i.e. 6500 X 1.02) Source: citehr query on EPF and EPS withdrawalQ: Employee is a member of Employees’ Pension Scheme. He/She has left employment at 48 yrs. of age and 8 yrs. of service. When shall he/she receive his/her pension?Ans: He/She can take either withdrawal benefit or can take scheme certificate so that the 8 years service can be added to any future service that he / she may put in, in any other covered establishment. By virtue of being a holder of a scheme certificate, if the member dies before 58 years widow / widower and children shall be entitled for pension.

The argument that the high cost of drugs is necessary to support R&D is certainly a hot topic question. It will tend to quickly spiral into an emotional argument about greed. However, there are a decent number of frameworks that you can point to that would indicate that it is the rational and justified thing to do. Do I necessarily agree with all of these arguments? Probably not. But the people who pay for our R&D funding think this way and, if that's the justification that we have to use, then so be it.This comes back to the phrase that Martin Shkreli loves to use: "Maximize Shareholder Value". To different people this means different things. It could mean short-term stock value (see Valeant) . It could be the ensuring the long term success of the company (see the opposite of DowDuPont). It could mean ensuring the development of a single drug (many orphan drug companies).For the people who actively work in the industry and who do the day to day work of making drugs, our mission is clear: get life saving drugs to patients. However, the people who fund our mission don't necessarily see it that way. Biopharma is in a tough bind because the company's value comes from shareholders who generally invest in high tech stocks. Without using names which company would you invest in?Mkt cap= $518 Billion, P/E ratio = 9.98, EPS = 9.40, R&D expenditures = 3% of net salesMkt cap = $281 Billion, P/E ratio = 18.59, EPS = 5.48, R&D expenditures = 11.4% of net salesMkt cap = $170 Billion, P/E ratio = 23.72, EPS = 1.24, R&D expenditures = 16.0% of net salesMkt cap = $137 Billion, P/E ratio = 31.43, EPS = 1.56, R&D expenditures = 17.0% of net salesMkt cap = $399 Billion, P/E ratio = 35.74, EPS = 1.41, R&D expenditures = 13.4% of net salesMkt cap = $238 Billion. P/E ratio = 405, EPS = 1.25, R&D expenditures = 8.8% of net sales.The companies in order are Apple, JnJ, Pfizer, Merck, Microsoft, and Amazon. Unsurprisingly, you can pick out the drug companies based on their R&D spend. Thus, every dime that gets spent in computer engineering or software making your stupid phone application is a dime that isn't being spent towards making drugs. Thus, pharmaceutical companies are in the uncomfortable position of begging the hedge funds that pick and choose where the world's money gets invested in that they should find it in their hearts to invest in making drugs rather than in the next dick pic sharing app.The below figure from JAMA showing the R&D spent as a % of revenue is telling. No industry spends as much as Biopharma. These numbers doesn't even include the surplus help we get from the NIH. Frankly, the increase in internet R&D only started going up in recent history because of Facebook's aggressive increase in R&D spending.[1]This competition in funding starts as early as VC funding. What's cooler? Investing in a cool tech company that will IPO in 3-5 years that will make billions or investing in a high risk biotech that will IPO in 5-7 years and won't have a product until year 9? Drug companies are losing out in the innovation sector because the financial sector is much more willing to invest in low risk, high reward ventures like tech rather than high risk, low rewards ventures like biotech.So those are the people we have to convince. They generally don't know much about how the industry works but they do understand that R&D costs money and an easy way to increase the earnings per share is by cutting R&D. As discussed in Does pharma only develop drugs for those who can pay? when sales are good and the investors aren't complaining as much, drug companies do siphon their extra earnings into high risk, low reward areas like tropical and neglected diseases. The GSK Malaria vaccine and the Sanofi Dengue vaccine are two notable examples of companies developing drugs at a massive loss supported by the extra earnings provided by the high cost of drugs. However, if you think 8-10 years is a long time for drug development, those programs took 20 years to complete.Unfortunately, Eroom's law (Moore's law backwards) fantastically suggests that the cost of drug development is gradually going up over time. [2] Certain pharmaceutical analysts, like Matthew Herper and Bernard Munos from Forbes, indicate that the cost for drug development isn't $2 billion per drug that the Tufts DiMasi analysis suggests but closer to $4 billion per drug; a number that executives are hesitant of admitting since no one would believe them. See The Truly Staggering Cost Of Inventing New Drugs. [3]​This is what drug companies have to deal with. They have to satisfy the unrealistic performance expectations of the tech industry while staying in compliance with some of the strictest government agencies in the world, with the general public against them, all while dealing with the extremely unpredictable human body.Even developing a drug that works faster, is more effective than everything else, has less side effects, easier to take, works in third world countries and costs less than conventional therapies [4] like Gilead's Sovaldi resulted in CEO John Martin resigning. [5]Is the high cost of drugs necessary? A lot of biopharma employees already work for a fraction of the costs that our colleagues are making over in other industries and we're willing to make drugs at a loss. Could we work with reduced costs of development? We'll survive and probably figure out how to make drugs even with shoestring budgets.[6] [7] [8] But in 2012, $68 billion were spent in the US by companies contributing as much as 58% of the total biomedical spending in the US coming from R&D budgets that comprised of 14% of their revenues.[9] The amount spent in drug R&D is directly correlated with drug sales and that amount is always in danger of going down if the earnings per share go down with it. If you want drug companies to continue to spend money in R&D and want to make sure that the people financing those drug companies money continue to fund those operations, you want those drugs to sell well.Footnotes[1] The Anatomy of Medical Research[2] Page on nature.com[3] The Truly Staggering Cost Of Inventing New Drugs[4] Sovaldi by Christopher VanLang on Making Drugs[5] Gilead CEO John Martin Step Down by Christopher VanLang on Making Drugs[6] Why should we abolish drug patents?[7] Would life saving medicines be invented in the absence of patents?[8] What would happen if pharmaceutical companies were required to be nonprofit?[9] Where does biomedical money come from? by Christopher VanLang on Making Drugs