A few readers have accused me in the past of being a sadist who wants them to do the dirty work of analyzing companies on their own, instead of simply recommending stocks like so many other blogs do.
But I’d rather give you a compass instead of a map, for you can confuse the map with the territory and lose your life’s savings walking that path.
In this pursuit of handing you another compass, here is Version 3.0 of my Stock Analysis Excel Sheet that you can download on your computer, read through the instructions to follow a few simple steps, and then analyze not just the past performance of a company but also arrive at its approximate intrinsic value range.
And unlike the previous versions where you were required to enter most data manually, this latest version feeds in data automatically from Screener.in website, which subsequently feeds into my sheets on financial analyses and intrinsic value calculations. So you must thank Screener’s creators and my friends Ayush and Pratyush before thanking me. 🙂
If you have been into financial modeling in the past, this excel file may seem like a child’s play. But, if my 14+ years of experience as an analyst is anything to go by, this is most of all you require to “quantitatively” analyze stocks…not models running into hundreds of rows and tens of sheets.
I have personally tried my hands at both the kind of models – the simple one that you can download below, and the complex ones that most analysts use in their doomed pursuits of finding the elusive target prices. Without a doubt, simplicity beats complexity hands down.
By the way, my analysis excel that you will download below – especially the intrinsic value calculations – works well with simple businesses that have a good track record of performance. Complex, volatile businesses must not be analyzed anyways, and no spreadsheet can help you there. Also, this excel won’t work for banking and financial services companies.
Let me now explain briefly the sheets this excel file contains:
- Instructions: After downloading the excel file on your computer, read this instructions sheet carefully before proceeding to use the rest of the excel.
- Summary: Contains some basic data of the company and a few warnings and disclaimers.
- Checklist: Contains a simple Buffett checklist that will help you a lot in your overall decision-making.
- Balance Sheet: Contains key Balance Sheet numbers and a few related ratios. Updated automatically. You just have to manually enter the “Cash & Bank” number (in Rs Crore) from the annual reports.
- Profit & Loss: Contains key Profit & Loss Statement numbers. Updated automatically.
- Common Size Analysis: Updated automatically. Contains common size analysis of both the Balance Sheet and the P&L Statement, and is an insightful way to analyze the changes in key numbers over the years, and compare across companies.
- Cash Flow: Contains key Cash Flow numbers. Updated automatically, except the “Capex” number that you must enter manually (in Rs Crore) from the annual reports.
- EPV Valuation: Updated automatically. Contains intrinsic value calculation as per the EPV framework described by Bruce Greenwald in his book Value Investing: From Graham to Buffett and Beyond.
- Dhandho Valuation: Updated automatically, though you may change assumptions in the black cells. Contains intrinsic value calculation as per the framework described by Mohnish Pabrai in his book The Dhandho Investor.
- Ben Graham Formula: Updated automatically. Contains intrinsic value calculation as per the framework mentioned by Ben Graham in The Intelligent Investor.
- DCF: Updated automatically. Contains intrinsic value calculation as per the discounted cash flow method.
- Expected Returns: Updated automatically, though you may change assumptions in the black cells. Contains intrinsic value calculation as per the framework described by Prof. Sanjay Bakshi in an interaction with me.
- Intrinsic Values: Updated automatically. Contains intrinsic value ranges calculated in the previous five sheets to enable you to assess the broad range as compared to the market cap of the stock.
- Quarters: Updated automatically. Contains a few key quarterly numbers.
- Data Sheet: Don’t touch this sheet at all. This is the core sheet from Screener.in site and any changes to it may produce errors if you want to customize the Safal Niveshak excel and upload again to Screener’s site.
While you can download this Analysis Sheet FREE of charge, you may pay me through your feedback, testimonials, and tweets. 🙂
Words of Warning!
Before you get down to using this excel, remember six critical things…
- It’s just a compass and not a map. So take your next step carefully.
- Don’t look for perfection. It is overrated.
- Focus on decisions, not outcomes.
- Look for disconfirming evidence. Avoid falling in love with the numbers.
- Remember Charlie Munger who said, “All I want to know is where I’m going to die, so I won’t go there.” Depending just on this excel for decision-making can really kill you (financially)!
Let me know if you found this excel helpful. I will try to improve upon this in the future based on your feedback.
Share your thoughts, suggestions, and testimonial for this excel in the Comments section of this post.