Thread by @finologyticker

Quarterly profit (Q4FY22) ⤵️

• Hindustan Unilever = 2327 Cr
• Godrej Consumer = 417 Cr

By seeing this number, we would think HUL is better 🤷

But that's not true. Let's find out ⤵️

#stocks #business

The Profit Margin for the same period is

• Hindustan Unilever = 17.29%
• Godrej Consumer = 25.53%

In this Godrej looks attractive.

So, what should we check: Profit or Profit margin? ⤵️

➡️ Profit

When we are analysing a single company, then we can look for profit figures over the years and their growth.

#nseindia

➡️ Profit Margins

When we are comparing two companies, then always check for margin % as that gives a clear picture.

But Why?

#invest

It's because it compares two companies on the same ground.

Company A does sales of 1000 Cr and makes a profit of 100 Cr.
Company B does sales of 600 Cr and makes a profit of 80 Cr.

Even with lower sales and profit, Company B is more efficient in earning better per sales done.

This is the reason while comparing two companies, we should check for Margin numbers.

Where to get margin %?🤔

➡️ In Common Size Statement.

It is a statement whereby each line item is expressed as a percentage of revenue or sales in the income statement and by total assets on the balance sheet.

Don't worry. You don't have to calculate it manually.

We have included Common Size statement for every company in ticker.finology.in/tickerplus

The % values in the purple patch are the margin numbers for all the rows. ⤵️

Benefits of Common Size Statement

• Easy to Understand
• Helpful for Time Series Analysis
• Comparison made easy
• Helpful in analysing breakup of line items

#stockmarkets #business

So, while analysing any company...don't just see profit numbers; check it with margin % and also with other factors.

Get it done in an easy inbuilt manner on ticker.finology.in/tickerplus

Do you use a common size statement for analysing the results of the company? 🤔

#stockmarketcrash