Shivam Saklani

In today's blog, we are going to keep discussing about how to check a company's financial health and look at six important metrices that every investor should consider about before investing in a company. This is an intermediate guide, which means we will explore a few more advanced parameters. In the last blog, we covered the basics, focusing on simple metrics. So let's discuss. PEG Ratio The full form of PEG ratio is Price to Earnings growth ratio. In simple words, it is one of the stock price value-measuring methods. It can be thought of as an improved form of P/E Ratio since it, too, shows how much earnings a company would have in the future. Most people are aware of and familiar with the P/E Ratio, but very few know the PEG Ratio. This is only because it is more complicated to understand the PEG Ratio, and each person tends to view it differently. Others would say that if the ratio is more than 1, it's too pricey. If less than 1, it's cheap—no more, no less. ...

Once valued at $22 billion, the Indian edtech company Byju's has fallen to below $2 billion today. When Byju Raveendran, the founder of the company, began with ambitious plans to disrupt the Indian edtech industry, a question annoyingly follows: what went awry that led to the initiation of insolvency proceedings? We will comprehend this in today's blog.  Massive Expenditure on Advertising The company's aggressive expansion plan and financial ignorance were highlighted. It ventured into foreign countries without studying demand and competition. This was costly and a failure. The company threw money at the wall on useless advertisements. Byju did not conduct cost-benefit analyses for major sponsorships and celebrity endorsements. Instead, they looked for sponsorships and deals. This was significant because poor financial decisions reduced revenue and increased debt. They were spending too much, which left them with less cash and higher costs to run the business. Looking at t...

L&T is one of India's largest and most diversified companies; it performs various activities in a very diverse number of areas and sectors, thereby making this company a very energetic and important one. The major focus areas are on engineering, construction, manufacturing, and technology. So why on earth would a construction company buy a technology company, especially when it does not match the company's main business? Did you know that L&T had no intention of acquiring Mindtree? So, how and why did it finally decide to buy a technology company? These will form the crux of our discussion with this case. Read more Case Studies at  Corporate Chronicals L&T Problem L&T had enough cash on its balance sheet with over US$2 billion of free cash flow in 2019. It was expecting another US$1.5 billion of such ready cash in 2020. All that the company wanted to do was to use this surplus cash on share buyback from the market. There was, however, no such approval of SEBI ...

Lakshmi Mittal is a noted personality worldwide in the steel industry and was born on June 15, 1950 in Sadulpur, Rajasthan. He comes from a business family which was engaged in steelmaking and commerce.   He completed his qualifications in Commerce, graduating as a Bachelor from St Xavier's College in Kolkata, after which he joined the family steel business at his father's insistence. However, his family was not aware of the fact that Mittal would not only expand the business but also take it to unprecedented global heights. In 1976, Mittal started his business career by purchasing an underperforming steel mill named PT Ispat Indo in Indonesia. He renamed it Mittal Steel to start off his own company. He bought several small underperforming steel plants in developing economies throughout the 1980s and 1990s. Such smaller deals brought quick expansion and spread out geographically for his firm. Having achieved success, Mittal steered towards an opportunity to significantly ...

If you are tired of sitting through hundreds of YouTube videos or reading thousands of articles and blog posts, but still do not know how to measure the financial health of a company, then you've come to the right place. In this article, we will discuss six simple and vital metrics that every retail investor should understand before investing in any company. These metrics will guide you toward making informed decisions and establishing whether a company is worth your money. Return on Equity (ROE) Return on equity (ROE) is an important measure of the efficiency with which a firm operates. ROE measures how well a company uses shareholders' equity to generate profits. It helps investors to understand whether or not shareholders' capital is being used efficiently and if returns are in accordance with expectation. Companies have a large number of shareholders who place their money with expectations that the firm will utilize these assets properly and profitably. ROE measures how...

The Adani Group, already battling allegations by U.S.-based short-seller Hindenburg Research as it transitioned out of allegations, faces the latest layer of accusations. This time, the challenge comes from a court in the U.S., which has alleged that Adani Green Energy bribed Indian government officials using the funds fetched from U.S. investors. It further claims that the bribes were in the tune of $250 million that were paid to get attractive contracts for providing solar energy to the government of India. It also charges Gautam Adani, founder of the Adani Group, personally with meeting with these officials to discuss the arrangements. Gautam Adani, his nephew Sagar Adani, and six executives tied to the Canadian pension fund CDPQ and its investee firm Azure Power, have been charged by the U.S. Department of Justice for their role in bribing Indian officials for favorable agreements about green energy projects. Impact on Stocks of Adani Group The most recent allegations have caused a...