looking for advice

#1
1. How can one tell whether company profits are really growing overall.
simply seeing yoy net profit growth really dont give a consistent image.

2. Moreover can someone tell me how to interpret - "Cash flow from Operating Activity", "Cash flow from investing activity" and "cash flow from financing activity"

3. what does it mean that "company is making profit but not paying tax? What does it mean and indicate?

regards,
kumar
 
#2
1. Profit can manipulated easily for instance you can capitalized some cost to increase your bottom line. You could look at consistent margin along with steady growth.

One way to test is to check increase in sales versus increase in profits. You need to look at company's cost structure i.e. whether it would increase with sales or not. Look at the cost structure to find out whether majority of cost is variable or fixed and how much increase in sales could be directly transferred to NI.

2. CF from operations is something that company generates after taking into account changes in working capital. In P&L there are some items which are non cash such as amortization and depreciation or write offs. These are not reflected in the CF from operations as it is not cash.

CF from investments could be related to PPE
CF from financing could be company raising new capital or paying down debt, this could be positive or negative depending on the case and life cycle of the company

3. You need to read annual report to find out the reason, it could be tax break, could be NOLs, could be TDLs, could be because of presentation or any other reason
 
#5
MR Singh,
Thanks a lot. Got some idea.

Could you please expand these abbreviations - PPE, NOLs, TDLs, NI.

regards,
kumar
My bad

PPE: Property Plant and Equipment
NOLs: Net Operating Losses
TDLs: Tax Deferred Liabilities
NI: Net Income

To learn about FA watch YouTube videos, read books such as Security Analysis by Ben Graham and be patient.
 
#7
Steve,
Does this CFA course practically help for stock investment for personal use.
My motive is to use fundamental analysis for investment.
Just doubt if this CFA course is not too theoretical and just for degree sake.
if you have personal experience with this course do guide me will it fit my requirement.
also how long is this course?

regards,
kumar
 
#9
Steve,
Does this CFA course practically help for stock investment for personal use.
My motive is to use fundamental analysis for investment.
Just doubt if this CFA course is not too theoretical and just for degree sake.
if you have personal experience with this course do guide me will it fit my requirement.
also how long is this course?

regards,
kumar
The full course is 2 years long. It is mostly for job than for personal use. I do not have experience with this course. I'm also thinking of joining a course by Safal Niveshak.
 

Einstein

Well-Known Member
#10
The full course is 2 years long. It is mostly for job than for personal use. I do not have experience with this course. I'm also thinking of joining a course by Safal Niveshak.
I read his interview, his first 10 years were basically disaster. he start buying on debt from banks. and initially face loss, now he is making his bread and butter by charging HNIs. If he is good why he is not making money? if he wants to teach, why he is charging high amount(even for small investors).?:mad:
 

Similar threads