Part 03: Fundamental Analysis
Chapters 16–27 · Ratios, ROE, ROCE, debt, FCF, dividends, ownership
Practice Lab (Hands-On)
| Resource | Description |
|---|---|
| 00-practice-lab | Diagrams, Indian market examples, 13+ practice questions with answer key |
| assets/diagrams | SVG visuals used across this part |
| 00-printable-worksheet.html | Print-friendly worksheet — Ctrl+P to save as PDF |
Complete the Practice Lab after finishing all chapters in this part.
Chapters in this Part
- 16-eps-earnings-per-share
- 17-pe-ratio
- 18-book-value
- 19-price-to-book-ratio
- 20-return-on-equity
- 21-return-on-capital-employed
- 22-debt-analysis
- 23-interest-coverage-ratio
- 24-free-cash-flow
- 25-promoter-holding
- 26-shareholding-pattern
- 27-dividend-analysis
Read in order for best learning flow.
Chapters
16EPS — Earnings Per Share and DilutionDisclaimer: EPS is an accounting based metric. Always compare with cash flow and check for one time17P/E Ratio — Valuation, PEG, and Sector ContextDisclaimer: P/E is a relative valuation metric. Compare within same sector; combine with growth, quality, and cash flow18Book Value — Shareholders' Equity per ShareApply: Book Value = Total Assets − Total Liabilities = Shareholders' Equity. BVPS = Book Value ÷ Shares. It measures Net Worth, Financial Strength, and…19P/B Ratio — Book Value vs Market PriceApply: P/B = Market Price ÷ BVPS. P/B = 1 means fair book value pricing; < 1 may be opportunity or trap; 1 may reflect quality or overvaluation. Primary…20Return on Equity (ROE) — Profitability and LeverageExplain how ROE measures return on Shareholders' Equity Book Value . High sustained ROE often creates wealth through compounding. But debt can inflate ROE…21ROCE — Return on Capital EmployedApply: ROCE = EBIT ÷ Capital Employed. Measures efficiency of ALL capital deployed, not just equity. ROE vs ROCE comparison reveals debt manipulation.…22Debt Analysis — D/E, Net Debt, and CoverageApply: Debt enables growth but creates survival risk. Key ratios: D/E, Net Debt, Interest Coverage. Good debt earns more than borrowing cost; bad debt…23Interest Coverage — Debt Servicing CapacityApply: ICR = EBIT ÷ Interest Expense — measures how easily company pays interest. More important than raw debt levels. ICR < 1 is critical danger zone.…24Free Cash Flow — CFO minus CapexApply: FCF = OCF − Capex — cash available after running and maintaining the business. Most reliable measure of financial strength and shareholder return…25Promoter Holding — Alignment vs Pledge RiskExplain how Promoter Holding measures management's skin in the game. Trend matters more than snapshot. Pledge creates hidden leverage risk. High holding…26Shareholding Pattern — FII/DII/Public MixExplain how Shareholding Pattern shows who owns the company — Promoters, FIIs, DIIs, MFs, Retail. Quarterly trend analysis essential. Smart Money…27Dividend Analysis — Payout, Yield, and SustainabilityApply: Dividend = cash return to shareholders from profits. DPS, Yield, and Payout Ratio are key metrics. High yield can be trap; low yield can be optimal…