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Portfolio Management: Noorulhadi Qureshi
Portfolio Management: Noorulhadi Qureshi
Prepared By:
Noorulhadi Qureshi
Lecturer Govt College of Management Sciences Peshawar
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Final Stage of fundamental Analysis Broad outline of the prospect of-Growth in the economy.
Internal information consists of data and events made public by companies concerning their operations. Its include annual report to Share holder, public and private stakeholders.
Company Analysis
External resources of information are those generated independently outside the company. These are prepared by investment services and the financial press.
Company Analysis deal with Return and risk of individual Share and security. Analyst tries to forecast the Future earning which has Direct effect on share price.
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Financial Statements
Two Basic financial statement are:
Balance Sheet (picture of Company asset and liabilities.) Profit and Loss Account. (It postulates the earning of company).
It helps to asses the profitability and financial health. Balance Sheet gives the list of assets and liabilities.
Fixed Assets are intended to be used up over a period of several years. Current assets are intended to be converted into cash with in one year. The outside liabilities are short and long term liabilities. Liability toward share holder show the share capital value.
Financial Statements
Income statement reveals the revenue earned and the cost incurred for a period in the company. Profit is Profit is Profit is \z
Financial Analysis
Assessment of the firms past, present and future financial conditions Done to find firms financial strengths and weaknesses Primary Tools:
Financial Statements Comparison of financial ratios to past, industry, sector and all firms
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Financial Statements
Balance Sheet Income Statement Cashflow Statement Statement of Retained Earnings
Sources of Data
Annual reports
Via mail, SEC or company websites
Fixed assets:
Tangible assets Intangible assets
Liabilities:
Current Liabilities: LT Debt & Other LT Liab.: Equity: Total Liab. and Equity:
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Ratios
Measure relationships between resources and financial flows Show ways in which firms situation deviates from
Its own past Other firms The industry All firms13
Types of Ratios
Financial Ratios:
Liquidity Ratios
Assess ability to cover current obligations
Leverage Ratios
Assess ability to cover long term debt obligations
Operational Ratios:
Activity (Turnover) Ratios
Assess amount of activity relative to amount of resources used
Profitability Ratios
Valuation Ratios:
Assess profits relative to amount of resources used Assess market price relative to assets or earnings
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Liquidity Ratio
Current Ratio:
Current Ratio : Current Assets Current Liabilitie s
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Leverage Ratio
Debt Ratio:
Debt Ratio :
TotalLiabilitie s TotalAssets
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Profitability Ratio
Return on Assets (ROA):
Net Income ROA : Total Assets
Profitability Ratio
Net Profit Margin:
EBIT Net Profit Margin : Sales
Retention Ratio
Retention Ratio ( ) : EPS - Div EPS
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Helps to identify sources of strength and weakness in current performance Helps to focus attention on value drivers
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ROE ROA Equity Multiplier Net Income Total Assets Total Assets Common Equity
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ROA Profit Margin Total Asset Turnover Net Income Sales Sales Total Assets
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ROE Profit Margin Total Asset Turnover Equity Multiplier Net Income Sales Total Assets Sales Total Assets Common Equity
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Benchmark with
Past for the company Industry
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