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5-Minute QuickScan

5 Minute QuickScan
Date:
		Basic Quality Standards			Question 2	Question 3	Question 4	Question 5	Question 6	Question 7	Decision
Company Name	Ticker	.OB or .PK?	Mkt Cap < $500M ?	Recent IPO?	3 to 5 years Positive EBIT?	3 to 5 years of positive Cash Flow from Operating Activities?	5 years of ROE > 10%?	5 Years of Debt to Equity Ratio < 1?	Recent Price to Book Ratio < 2?	3 years of only positive net Tangible Assets?	Keep and Conitue to Analyze or Drop Company?

Data Input

Stock Ticker	0
Year	2013	2012	2011	2010	2009
Quote
Current Price
P/E
Market Cap		[in million USD]
Shares Outstanding		[in million]
Earnings
Earnings Growth Rate
Company [Next 5 Years]		[in decimal]
Financials
Income Statement
	2013	2012	2011	2010	2009
Total Revenue (Sales)
Gross Profit
Operating Income
Net Income
Interest Expense, Supplemental
Diluted Normalized EPS
Balance Sheet
	2013	2012	2011	2010	2009
Total Inventory
Total Current Assets
Total Assets
Total Current Liabilities
Total Long Term Debt
Total Liabilities
Retained Earnings (Accumulated Deficit)
Total Equity
	2013	2012	2011	2010	2009
Total Common Shares Outstanding
Cash Flow Statement
	2013	2012	2011	2010	2009
Cash from Operating Activities
Capital Expenditures (Ignore the negative sign)
Fundamentals
Key Ratio [10 Year Summary]
	Avg P/E	Book Value/ Share
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004

Value Indicators

Value Indicators Worksheet
1	ROIC - ROIC > 12% since most businesses lends between 8% and 12%
	Year	2013	2012	2011	2010	2009
	Net Income	- 0	- 0	- 0	- 0	- 0
	Interest	0.00	0.00	0.00	0.00	0.00
	Long-Term Debt	- 0	- 0	- 0	- 0	- 0
	Total Equity	- 0	- 0	- 0	- 0	- 0
	Invested Capital	- 0	- 0	- 0	- 0	- 0
	ROIC	0.00	0.00	0.00	0.00	0.00
2	Equity Growth Rates:
	Year	2013	2012	2011	2010	2009
	BVPS	0	0	0	0	0
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.00	0.00	0.00	0.00
3	EPS Growth Rates:
	Year	2013	2012	2011	2010	2009
	EPS	0.00	0.00	0.00	0.00	0.00
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.00	0.00	0.00	0.00
4	Sales Growth Rates
	Year	2013	2012	2011	2010	2009
	Sales (Revenue)	0.00	0.00	0.00	0.00	0.00
	Sales Growth Rates:
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.000	0.000	0.000	0.000
5	Operating Cash Flow (OCF) and Free Cash Flow (FCF) growth rates
	Year	2013	2012	2011	2010	2009
	OCF	0.00	0.00	0.00	0.00	0.00
	CAPEX	0.00	0.00	0.00	0.00	0.00
	FCF	0.00	0.00	0.00	0.00	0.00
	OCF Growth Rates:
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.000	0.000	0.000	0.000
	FCF Growth Rates:
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.000	0.000	0.000	0.000
6	Gross Margin (>40% is sign of durable competitive advantage; <20% is indicator of highly competitive industry).
	Year	2013	2012	2011	2010	2009
	Sales	0	0	0	0	0
	Gross Profit	0.00	0.00	0.00	0.00	0.00
	Gross Margin	0.00	0.00	0.00	0.00	0.00
7	Operating Margin (>= industry or sector average). (Industry: … ...%; Average of competitors: … …%)
	Year	2013	2012	2011	2010	2009
	Sales	0	0	0	0	0
	Operating Profit	0.00	0.00	0.00	0.00	0.00
	Operating Margin	0.00	0.00	0.00	0.00	0.00
8	Net Margin (> 20% => competitive advantage; <10% sign of competition)
	Year	2013	2012	2011	2010	2009
	Sales	0	0	0	0	0
	Net Income	0.00	0.00	0.00	0.00	0.00
	Net Margin	0.00	0.00	0.00	0.00	0.00
9	Free Cash Flow Margin (>= 10% indicator of competitive advantage; must not be < 3%).
	Year	2013	2012	2011	2010	2009
	Sales	0.00	0.00	0.00	0.00	0.00
	Free Cash Flow	0.00	0.00	0.00	0.00	0.00
	FCF Margin	0.00	0.00	0.00	0.00	0.00
10	Short-Term Financial Health
10.1	Current Ratio ≥ 2
	Year	2013	2012	2011	2010	2009
	Current Assets	0.00	0.00	0.00	0.00	0.00
	Current Liabilities	0.00	0.00	0.00	0.00	0.00
	Current Ratio	- 0	- 0	- 0	- 0	- 0
10.2	Quick Ratio ≥ 1.5
	Year	2013	2012	2011	2010	2009
	Current Assets	0.0	0.0	0.0	0.0	0.0
	Inventory	0.0	0.0	0.0	0.0	0.0
	Current Liabilities	0.0	0.0	0.0	0.0	0.0
	Quick Ratio	0.00	0.00	0.00	0.00	0.00
10.3	Interest Coverage Ratio ≥ 5 minimum; but preferably ≥ 10 (except utilities ≥ 2)
	Year	2013	2012	2011	2010	2009
	EBIT	0.00	0.00	0.00	0.00	0.00
	Interest Expense	0.00	0.00	0.00	0.00	0.00
	Interest Coverage	0.0	0.0	0.0	0.0	0.0
10.4	Operating Cash Flow Ratio ≥ 1
	Year	2013	2012	2011	2010	2009
	OCF	0.00	0.00	0.00	0.00	0.00
	Current Liabilities	0.00	0.00	0.00	0.00	0.00
	OCF Ratio	0.00	0.00	0.00	0.00	0.00
11	Long-Term Financial Health
11.1	Leverage Ratio: Debt to Total Asset Ratio ≤ 0.50 except utilities for which 1.0 is acceptable
	Year	2013	2012	2011	2010	2009
	Long-Term Debt	0.0	0.0	0.0	0.0	0.0
	Total Assets	0.0	0.0	0.0	0.0	0.0
	Debt to Assets Ratio	0.00	0.00	0.00	0.00	0.00
11.2	Debt to Equity Ratio ≤ 1
	Year	2013	2012	2011	2010	2009
	Long-Term Debt	0.0	0.0	0.0	0.0	0.0
	Total Equity	0.0	0.0	0.0	0.0	0.0
	Debt - Equity Ratio	0.00	0.00	0.00	0.00	0.00
11.3	How long will it take the company to pay off its long-term debt using Cash Flow from Operations? 3 years or less.
	Year	2013	2012	2011	2010	2009
	Long-Term Debt	0.0	0.0	0.0	0.0	0.0
	OCF	0.0	0.0	0.0	0.0	0.0
	How long to payoff Debt	0.0	0.0	0.0	0.0	0.0
12	Growth in Retained Earnings
	Year	2013	2012	2011	2010	2009
	Retained Earnings	0	0	0	0	0
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.00	0.00	0.00	0.00
13	CAPEX Per Share
	Year	2013	2012	2011	2010	2009
	CAPEX	0	0	0	0	0
	Common Stock Outstanding	0	0	0	0	0
	CAPEX per Share	0	0	0	0	0
	4-year Growth rate	3-year Growth rate	2-year Growth rate	1-year Growth rate
	0.00	0.00	0.00	0.00

PE Ratio Valuation

Estimating Intrinsic Value (P-E Ratio Approach), comparing with Price and Making Purchase Decision based on Margin of Safety

Step 8

Step 8A: Gathering Data

P/E Ratios

Year

Latest

Year -1

Year -2

Year -3

Year -4

Year -5

Year -6

Year -7

Year -8

Year -9

Year -10

P/E Ratio

Average P/E Ratio

0.00

**(Check the formula for average)

Analysts Estimate of EPS Growth Rate:

(see MSN Moneycentral Analysts Estimates)

Latest (full year) EPS =

0.00

k =

0.15

(may try different numbers based on what you know about the company's moat, financial health and historical ROA).

Current Price =

Step 8B:

Using the Data

EPS at end of last year, EPS0 =

0.00

1. Average EPS growth rate =

0.00

(use the EPS growth rate over the longest period (3-, 4- or 5- year period) you can find)

2. Average Equity growth rate =

0.00

(use the BVPS growth rate over the longest period (3-, 4- or 5- year period) you can find)

3. Analysts estimate of EPS growth rate =

(see above)

Equity Growth Rate to use for Calculations =

0.00

(This the lowest of the three numbers above)

Average P/E over 5 years or 10 years =

0.00

k, the required rate of return =

0.15

Step 9:

Estimating what the business is worth

1. Estimate EPS ten years from now, EPS10 = EPS0 (1+g)10

0.00

2. Multiply EPS10 by P/E and call that V10; that is V10 = (EPS10.)x(P/E).

0.00

This gives you the intrinsic value ("Sticker Price") ten years from now.

3. Calculate today’s supposed intrinsic value, V0 = V10 x [1/(1+k)10)]

0.00

Purchase Decision

Step 10:

Current Price =

0.00

Current Price/Intrinsic Value =

0.00

Margin of Safety

0.00

Decision:

Buy if margin of Safety is greater 50%.

Consider buying or put on Watch List if Margin of Safety is between 20% and 50%.

Put on Watch List if Margin of Safety is less than 20%.

FCF Valuation

Estimating Intrinsic Value Using Free Cash Flow Approach
1	Data
	OCF =	0.0	Capital Expenditure =		0.0
	a. Latest FCF									0.0
	b. Rate of Growth of FCF over the next 10 years (use lower of 10% or company's 5-year growth rate)									0.10
	c. Terminal Growth Rate (Rate of growth of FCF from year 11 in perpetuity - use average GDP growth rate)									0.03
	d. Discount rate									0.15
	e. Number of shares outstanding (undiluted)									0.00
	Number of shares outstanding from last year									0	(for use in calculating F-Score)
	Number of shares outstanding two years ago									0
2	Estimates
	a. Estimates of FCF from year 1 to year 10
	b. Estimate of intrinsic value in year 10
	c. Estimate of intrinsic value today
		Year:	0	1	2	3	4	5	6	7	8	9	10	11
			FCF0	FCF1	FCF2	FCF3	FCF4	FCF5	FCF6	FCF7	FCF8	FCF9	FCF10	FCF11
		FCF	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
		PV of FCF		0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
		Intrinsic Value in Year 10											0.0
		Intrinsic Value	$0
		Intrinsic Value per share	$0.00
3	Current market price				$ - 0
4	Ratio of current price to intrinsic value				0.00
	Margin of Safety =				0.00
5	Purchase or sale decision
		Buy if Margin of Safety is 50% or more.
		Consider buying or putting on Watch List if Margin of Safety is between 20% and 50%.
		Put on Watch List if Margin of Safety is less than 20%.

Piotroski F Score

Piotroski Screening (F-Score) Criteria
	Criterion	Score
1	The return on assets for the last fiscal year (Y1) is positive	0
2	Cash from operations for the last fiscal year (Y1) is positive	0
3	The return on assets ratio for the last fiscal year (Y1) is greater than the return on assets ratio for the fiscal year two years ago (Y2)	0
4	Cash from operations for the last fiscal year (Y1) is greater than income after taxes for the last fiscal year (Y1)	0
5	The long-term debt to assets ratio for the last fiscal year (Y1) is less than the long-term debt to assets ratio for the fiscal year two years ago (Y2)	0
6	The current ratio for the last fiscal year (Y1) is greater than the current ratio for the fiscal year two years ago (Y2)	0
7	The average shares outstanding for the last fiscal year (Y1) is less than or equal to the average number of shares outstanding for the fiscal year two years ago (Y2)	1
8	The gross margin for the last fiscal year (Y1) is greater than the gross margin for the fiscal year two years ago (Y2)	0
9	The asset turnover for the last fiscal year (Y1) is greater than the asset turnover for the fiscal year two years ago (Y2)	0
	TOTAL	0
	F-Score of 8 or 9 => strong company; low probability of bankruptcy.
	F-Score between 0 and 2 => weak company; high probability of failing.

Altman Z Score

Altman Z Score:
Current Assets	0
Current Liabilities	0
Total Aseets	0
Operating Income	0
Market Cap	0
Total Liabilities	0
Retained Earnings	0
Sales	0
	Ratios	Score
X1 = Working Capital / Total Assets	0	0
X2 =Retained Earnings/Total Asets	0	0
X3 = Operating Income/Total Assets	0	0
X4 = Market Capitalization / Liabilities	0	0
X5 = Sales / Total Assets	0	0
	Total	0
Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
Z < 1.8 => High probability of bankruptcy
1.8 < Z < 2.7 => caution; moderate probability of bankruptcy
2.7 < Z < 2.99=> proceed with caution
Z > 3 => safe; bankruptcy unlikely.