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Try to brain-storm yourself before you proceed to next steps in the 🧵
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Step 1 - Identifying the problem correctly. Don't assume everything presented to you is correct.
Most people fail at this step. Sometimes there are data errors in examination paper as well. It's rare but it does happen !
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Step 2 - Real issue is how to handle -ive (NEGATIVE) EPS in the formula. Next thing I taught was to break task in to sub-tasks, simplify all jargons and think about all possible business scenarios.
Highlighted Red where you have trouble..
Deccan Cement falls under Scenario F.
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Step 3. Once you broke down to possible business scenario brain-strom to tackle them. For that apart from business knowledge, query skills you also need Data understanding.
This is how Step 3 will look when you transformed your thoughts & understanding into possible solution.
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Step 4 When you have possible solution this step is to transform it into the #screener formula ->
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Step 5. Next step is Validation of your formula & eliminating any issues & improving it further if needed. Here is validation, you can see how Deccan Cement is appearing.
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Leave you with little brain-storming tasks ->
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⚡️Take away
- What should be Promoter Holding ?
- How much Debt ? Should we only invest in low debt companies ?
- Should we only invest in less Debtor days ? When can be High Debtor days companies be good investment ?
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How much Debt ? Should we only invest in low debt companies ?
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Promoter Holding = 0
There are around 90 companies which are run by Board & hence Zero Promoter Holding !
Don't forget them, some are really great compounders !