Profit And Loss Account Balance Sheet: Fill & Download for Free

I will give you one and only suggestion. “ANNUAL REPORTS!!!!!”Try to read and understand the annual report of any ONE of the large cap stocks. I bet you will definitely not understand anything on the 1st attempt!!. Read it a few times to understand it. It will give you an overview or a detailed view about the company, its management, their compesation, Profit and Loss statements, Balance Sheets, Cash Flows, etc.If you are not from an accounts background, it will take a while to understand the PL statements, Balance sheets, Cash flows etc. Whatever is greek & latin to you, Investopedia or various blogs should really help. There are lots of such analysis by emminent personalities, which will give you a different perspective on how to read an AR and how to analyze.This process should ideally take atleast 1 or 2 months if u r part time.Once you are comfortable with 1 annual report, read more. You have to go through it umpteen number of times to find a pattern among all the ARsIf you diligently do this exercise, you will definitely come across all the websites, books, which were discussed in rest of the anwers!!!Reading and understanding ARs will fetch you more money in 2 years than Refreshing your portfolio every now and then !!!All the best to make lots of money!!!!!

I am an avid reader, self-learner and have patience to read hundreds of books if I need to understand any topic. Even though I studied Finance, I found it pretty complex, too technical and overwhelming reading many of the articles on stock analysis such as Fundamental or Technical Analysis. So we can imagine how a person without Finance knowledge could get frustrated and confused reading them.Can’t these things be explained in plain, simple and layman’s language so that even 5 year old kid can understand? This is where I come in and I will try my best to keep things as simple as possible. This article could be little lengthy but should provide exclusive coverage about Fundamental Analysis, its objective and the purpose they serve. Whether for Fundamental or for Technical Analysis, the BUY LOW and SELL HIGH concept remains the same.Fundamental analysis of stocks (or shares) is the way by which an investor tries to examine the financial health or do valuation of a company he or she wishes to invest in. It is done mainly by referring the financial statements of the company like Cash Flow Statement, Profit and Loss Account (or Income Statement) and Balance Sheet. Fear not, one does not need to have a BCOM or a CA degree to understand them. Just continue to read with patience.Technical Analysis of stocks on the other hand is the way by which a trader tries to predict or forecast the movement of the stock price. Technical analysis attempts to understand the market sentiment behind price trends rather than analyzing a company’s fundamental attributes. Technical analysis is applicable not just to stocks, but also for indices, commodities, futures or any tradable instrument where the price is influenced by the forces of supply and demand.Trader means a person or an institute who buys and sells the same share within a short period of time like within minutes, within hours, within a day, within a week, within weeks or within 5 or 6 months. When a person or an institute buys a share and hold it for longer than 6 months, they are called investors. So if the investor wants to invest for longer period, one should give more attention and importance to fundamentals analysis of a company. Technical analysis is done for short period of time and does not sustain for long. However if the wrong analysis is done and utilized for the wrong action, we can burn our money without any fire.Just to give a little background about the Indian Companies, their financial year is April to March. So Quarter 1 results are for April to June, Quarter 2 Results are for July to September, Quarter 3 Results are for October to December and Quarter 4 Results are for January to March. Also the results that are published are all historical, example results are for last Quarter or Last Year. Actual Final Books of Accounts (Financial Statements) especially Balance Sheets are prepared once in a year which is for the March Year End in India. However just to give update on the performance of the company for investors’ sake Profit and Loss Account (or Income Statement) is also announced every quarter.If we want to know the real time Company Result status, there is no way we can find from company results but investors rely on news, policies, politics, tax amendments, company news, market news, economic news, exchange rates etc. to learn that could affect their stock prices at present or in the future. It is always good to know things that are happening around locally and globally and the sentiments of the other investors; especially when we are risking our money in investment. News can affect the stock prices in Neutral, Positive and Negative ways. Also there are lots rumor and speculation that spreads very often about the company or the market you might invest in but avoid over reacting during such situations.The main and basic objective of the Fundamental analysis is to find out the true or actual value (fancy name is fair price or intrinsic value) or price of a stock at present and its future growth capability. Then we could compare this actual price of the stock with the market price that it is presently trading, before we put our money in. Ideally this actual price should be closer to the market price. If the market price is lesser than the actual price, then we can conclude that market price is undervalued and has the potential to grow. However if the market price is higher than the actual value, market price is overvalued meaning it could correct sometime in the future or come down than the present price. The basic idea of this exercise is to find out whether we are about to overpay or get at discount price for the same stock we just did the valuation if we are to invest in.Fundamental analysis is like a scorecard or progress report, which helps in evaluating Sales Revenue, Margin, Debt, Expenses, Asset, Liabilities, Cash Flow, Book Value, Reserves and Surplus, Tax Expenses, EPS, Dividend, Share Holding%, Face Value, Authorized Capital, Issued Capital and Total number of Shares. Phew ! Please don’t get panic by looking at the terms above it is not that difficult as it sounds. These above information are available in Balance Sheet, Profit & Loss Account and Cash Flow Statement, which are updated and available for public to look at to do the analysis. In these books we will get all the historical data as well as the latest such numbers which are very essential to determine the health of a company and price of the stock or share.There are other terms and ratios that you might come across such as PE Ratio, Price to BV Ratio, Debt to Equity Ratio, Current Ratio, Quick Ratio, EV to Sales ratio and etc etc. We could derive or calculate such endless list using only Balance Sheet and Profit & Loss Account. It is a quick way and lazy of identifying first level of valuating a stock but not the complete analysis. Fact is such ratios are just the derivative and ratios, and does not mean anything without looking at the actual numbers or compare with other companies in the same market segment. These ratios cannot completely replace the actual numbers from Balance Sheet and Profit & Loss Account and they could also misguide without any supporting actual facts. For example if we see something like PE ratio of Company A is 26.04 and PE ratio of Company B is 38.04 and do not have any other information. Is there any way we could conclude whether Company A or Company B is better?Let us take some actual example of valuating a stock with real Balance Sheet, Profit & Loss Account and Cash Flow Statements. All these 3 company statements are interrelated. It is getting little technical in this section, but we do not need to know all the details and we would do a very high level reading for beginner level.Now let us try to take actual Financial Statements of Phillips Carbon Company and do Fundamental analysis and see whether it is a good stock to invest or not. We could look both at the Standalone or the Consolidated books, but most of the companies have most chunk of their business in Standalone books. Consolidated books also shows the accounts of their child companies or their subsidiaries.Note: This demonstration is just for educational purpose and not to defame or praise any company.The Balance Sheet: This is the most important and critical statement of a company which reflects the state of health for a particular year. This statement shows what assets (what company owns) and liabilities (what company owes) of the company are.Below screenshot is taken from Actual Balance Sheet(Old Format, Stand Alone) available for Phillips Carbon in Money Control website updated till 2017 March Year End and for last 5 Years.Balance Sheet for Phillips Carbon Black as on Year End 31st March 2017:We don’t have to look through each of the items in the list. Some of the Key Numbers are like Reserves, Book Value, Total Asset, Net Current Asset and Investment. Higher and consistent growth these numbers appear year over year the better it is. All these numbers should be POSITIVE. All the other numbers are good to know but optional and does not carry much weightage for our analysis. Reserves are above and beyond operational need and are utilized for giving dividends, Bonus, Acquisitions (to purchase new companies) and for any other beneficial activities of the company.There are other numbers we need to look at like Total Debt (Secured Loans + Unsecured Loans), Current Liabilities, Contingent Liabilities and Provisions. Lower these numbers are better it is for a company. In general debt should not be very high. Higher debts indicates that company is over borrowing and once debts starts growing year over year it means the company is not repaying the debts. Any time such lenders can file a case against the company.The Profit and Loss Account:The Profit and Loss account is the details that show the Income and Expenditure beyond the factory gates (as per definition) for a given financial year. It shows whether company is under profit or incurring loss for a given year.Actual Profit and Loss Account Year Ending as on 31st March 2017:P&L Account Quarterly for Phillips Carbon Black as on September 2017:Like Balance sheet, we do not need to know all the other items which are good to know but optional. Good thing about Profit and Loss Account is that it is published on quarterly basis for the sake of investors even though conventionally it used to get published once a year.This statement would show the Total Sales, Profit, Revenue from other sources, Operational Expenses, Raw Materials, Tax, Total Number of Shares, Earnings per Share (EPS), Dividend % and Book Value.The basic idea about this statement is that it describes how much Profit or Loss the Company is incurring for a given period. As long as the Revenue, Margin, Book Value and EPS grow continuously in positive direction, all is well.The Cash Flow Statement:The Cash Flow Statement of a company shows how the cash and funds are getting utilized. It also gives the cash position of the company and net increase or net decrease of cash for a given period. Many users of financial statements prefer to use metrics derived from the statement of cash flows because cash flows are much more difficult to manipulate versus operating or net income. Cash flow per share, free cash flow and cash flow to debt are among the measures that can be calculated using information found on the statement of cash flows. Each of these metrics offers a unique insight into a company's financial health. Overall if a company is spending money on Investment it is a good sign.Cash Flow Statement for Phillips Carbon Black for March Year Ending and 5 consecutive Years:Other than the above views, I am grateful and too used to looking at Money Control Website. It gives a Peer Comparison where it lists all the companies of the same market segment or same category with Market Capital, Sales and Margin numbers. It is good to compare the Market capital in the same segment to gauge how much percentage of market share that company is in. Also one can check the Capital Structure in Financials section to know the Face Value of the shares including Authorized and Issued Capital and Total number of Shares. Face value of a share price is on which dividend is calculated.After we are done with the above exercise to look at Financial Statements of the Company, the actual valuation of the share price can be done in many ways but demonstrating in 2 ways.1) FIRST METHOD: Under this method we first take the Total Asset(A) and then Deduct Total Funds(B), Deduct preference Shares if any (Phillips Carbon does not show Preference Share but has only Equity Shares as D) and get Net Capital(E).Net Capital as ( E) is in Rs INR Crores, so we multiply by 10000000(7 Zeros) to get it to actual value as (F).Then we divide Net Capital ( E) by Total Number of Shares(we can get this number from Balance Sheet(G) or from Captial Structure under Finance in Money Control).Actual Value or Fair Book Value is derived as (H) which is as per the date the Balance Sheet was prepared on as Rs416.62 (approx.) per share. In this case it is 31st March 2017.We need to compare this Actual Share Price value (H) with the market share price(I) as on 31st March 2017. We can get this value from Graphs section in Money Control when we hover the cursor by changing to “2Y” view.For Phillips Carbon Market Share price as on 31st March 2017 was Rs325.6 per share.In this exercise Market Share price (Rs325.6 as I per share) is lesser than the Book Value(Rs416.62 as H per share). So our assumption and conclusion is that Market share price has the potential to rise at least to Book value and it is around 27.96% higher than the current market price as on 31st March 2017.Had the Book value was lesser than market price, then the assumption would have been that market price would correct some time in future.This method is my personal preference over the second method because all the calculation is done on the Book Value without any assumption.The biggest drawback of this method is that true value can be calculated as on 31st March till date because of Balance Sheet and cannot calculate exact share price for later dates which could change over a period of time.2) SECOND METHOD: In the second method we use one of the most popular Intrinsic Value calculation formula developed by Benjamin Graham. There are many other formulae available. He was the teacher of Warren Buffet and considered as the father of value investing technique. By this method we tend to use the latest Quarterly Result using Profit and Loss Account data and calculate the latest Actual Share price but in the First method we used the historical Balance Sheet to calculate as on that day.For this formula we need to know the Earning Per Share(EPS) of the Company, Current Market Price, Growth Rate of the Company, and Current AAA Corporate Bond Rate.Its formula is given as INTRINSTIC VALUE of a Share=EPS * (8.5 + 2g) * (4.4/Y), where EPS is earning per share of a Company, g is average growth rate of the company, 8.5 is PE Ratio of a stock with 0% growth, 4.4 is the Constant what Graham determined to be his minimum required rate of return, and Y is today’s AAA corporate bond rate.In our case EPS of Phillips Carbon = 14.73 (as per September Quarter 2017 result). g or growth Rate of Phillips carbon in last 5 years has been high but to be on conservative let us say it would continue to grow at 55% even for next 7 to 8 years annually. Lets say that Y is 6% as per Indian market.So, as per the formula we have Intrinsic Value= 14.73*(8.5+2*55)*(4.4)/6=Rs1280.03 per share at present.However current market Price of Phillips carbon as on 22 November 2017 is Rs977.65 per share.Using this we can conclude that current market price of Phillips Carbon Black’s Share Market value (Rs977.65) is lesser than Intrinsic Value (Rs1280.03). So the Market Share price of Phillips Carbon Black has the potential to grow to Rs1280.03 shortly which is around 30.93% as on 22nd November 2017.There is a quick link that one can calculate online at http://www.getmoneyrich.com/stock-price-valuation-intrinsic-value/.The biggest drawbacks of Graham formula is that it was developed for USA market and considering its growth Rate. Also this formula is dependent on the assumption numbers which are usually conservative. Another fact to consider that India is one of the fastest growing economy, with higher growth rates.So by any of the two methods, we can determine the Actual Share price as per Book Value and Compare with market price to evaluate whether market share price is currently undervalued or overvalued. Also we may get different Intrinsic Value by using different methods.Now I have the option whether to invest in Phillips Carbon Black or analyze some other stocks. Personally I found that Phillips Carbon is a very good stock and has been performing very well from last 3 years. It have less debt, good reserve, good sales, good margin and good decent Market Capital. Last Quarterly result has been excellent and growth of this company is very good. Hoping that this company would grow in similar way, I have personally invested in this stock.Fundamental Analysis is the analysis done on the estimated value of Company results that are published, upon which the valuation done would vary in actual. Stock prices in the market are mainly driven by the Company Results and their Fundamentals. This is the reason the Fundamental Analysis of stock is the more reliable analysis used by Investors. Also true fundamental analysis can be done only for Company Shares and not for other securities. Kindly do not rely purely on Fundamental Analysis only, there are other external factors that drive the stock prices such as the sentiments of the people, local and global economic factors etc. MANY PEOPLE DO NOT HAVE PATIENCE TO LEARN FUNDAMENTALS OR IGNORES TO READ WELL, THAT IS A BIG MISTAKE. If one does not know how to read the fundamental and invest in share, it could become like gambling outcome of which is mostly loss unless you have a reliable advisor.After we have done Fundamental Analysis and finding out the actual price of the share, we also need to consider below points before we jump into investment.These are the points that I have added based on my personal experience:1) Do not invest on High Debt Companies2) Do not invest on continuous Loss making Companies3) Avoid Penny Stocks and IPOs4) Diversify your portfolio5) Invest your time on Stock and Market News6) Follow Quarterly results and stock segment news7) Invest with proper long term goal8) Compare the Company with other companies of the same market segment or Average Industry numbers.9) Go by the Data rather than intuition10) Learn Adopt and Change your strategy if needed.If you have done proper fundamental analysis, chances are that you would be profitable mostly; provided if you invest on the quality stocks and for longer time. Do not invest in any stock if you have less confidence or if your analysis data does not support it. Try to balance between greed and fear and do not panic during market crashes. Try to consider volume of stocks traded (higher the better as per the stock price) so that you might be able to exit in worst cases. Do not over react for speculation unless there is concrete news. In the initial investment one may make losses as well but keep investing, it would get better year by year. Also as an investor, the most important quality is to be patient.Reading the fundamentals requires time and effort and would take time to master it. Once we master this art and start investing, over a period of time we have chances of earning billions of money in our lifetime. If we sow a seed in our garden, do not expect it to grow into a tree overnight or within months. It takes time and years before a seed grows into a tree. So does our invested money need some time to grow.Edit: Chart in Excel Sheet has been corrected. Thank you Bvr Charan for highlighting it.Hope this article has brought more insight on Fundamental Analysis and was helpful. All the best.

General ledger accounts are categorized between those used in the Balance Sheet and those used in the Profit and Loss Statement. Balance Sheet accounts are not closed while Profit and Loss accounts are closed at the end of the annual accounting cycle.Balance Sheet accounts track an enterprise’s assets, liabilities and equity in perpetuity and therefore, just like an individual’s bank account (as an example), you can see what your balance is at any point in time. That’s why these accounts are not closed out at the end of the accounting year.Profit and Loss accounts, on the other hand, track the enterprise’s revenues and expenses for the accounting cycles. Once the end of the annual cycle is reached and after finalizing the income statements and other reports, you need to close these accounts, i.e. reset them to zero so that you can start tracking the profit and loss for the next accounting cycle.