Cash flow statements are of a recent origin – it was not available to us in the 1980s – and we had to create it ourselves. It is a statement which shows the inflow and outflow of cash – for a particular period of time (like the Profit and Loss account). It shows you how […]
All of us know that a company can make a profit or a loss. So why is this statement (account) called Profit and Loss account? the Americans call it the ‘Income statement’. Simple. This account summarizes all the financial activities – so if you made a loss by selling a car, and profit by selling […]
The shareholders put money into a company to do business. How much is the money that shareholders put into a company? Money that they actually invested as equity Money that they actually invested as premium Money that they DID NOT TAKE AWAY as dividend – aka the profits left in the business What is all […]
Knowing accountancy and understanding the basics is a pre-requisite for investing in direct equity. However, some people believe that this is ENOUGH. Sadly, this is not so. Once you start understanding accountancy you will appreciate that numbers taken in isolation do not work. You will realize that “avoid companies with debt” or “company should have […]
I was stunned when one CEO said “your lectures are not good for my company”. I did not pay much attention. A few days earlier a fund manager told me that a HR manager looks for people who will work hard get promoted feel worthless about himself/herself converts income into lifestyle expenses works harder to […]
I found a person with Rs. 50 crores with 115 companies. Had to be pruned to 25. On doing this, the portfolio started doing well. https://www.bloombergquint.com/markets/2017/10/17/chase-value-not-price-raamdeo-agrawals-focused-investment-approach