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In Fundamental Analysis

Stock Valuation Made Easy

  • Advanced
  • English
  • 5150 Learners
  • Validity: 3 Years

Business Valuation Course Highlights

  • 6+ hours of recorded content
  • 10+ Practice Worksheets
  • 10+ Downloadable Supplementary Materials
  • Certificate of Completion

Introduction

Stock selection is a dilemma for most of the investors. You are unable to understand which stocks to select or what the right way for stock selection is. Going by what you hear, you may buy stocks that can be either overvalued or undervalued.

Being a long-term investor, you may want to hold quality stocks for the future that can help you with long-term wealth creation. But here, picking up stocks randomly does not help.

You need to take a structured approach, and you need to learn the entire psychology of a stock, right from understanding the intrinsic value of the stock to a detailed understanding of each of the components mentioned in the company's financial statements. 

Here, you will also be required to learn the various ratios, and most importantly, you will have to understand the financials of the company. 

There are situations where you research a stock, buy it & hold it as a long-term investment to gain good future returns, but over a period of time, you realise that the valuation of the stock is overpriced. Thereby making your investment decision wrong & you fail to gain the decided returns from that stock. 

However, if you understand the intrinsic value of a stock, you can diversify your portfolio by selecting stocks from fundamentally strong sectors. This will allow you to have a more strategic approach towards investing. 

We have created a stock valuation course to provide you with a strong foundation and rationale for your investment choices. It will give you the skills necessary to understand the market without being influenced by market noise or emotional reactions.

Stock Valuation Made Easy is a self-paced course that will help you identify the fair value of a stock. This course will help you by providing a practical and in-depth understanding of financial statements. At the end of the course, you will be able to understand the value drivers and make decisions unaffected by short-term price changes.

Please find the overview of the topics covered under the course Stock Valuation Made Easy:

Section 1: Decoding the Financial Statements

Topic 1: Understanding the Financial Statements: 

  • You will begin by understanding the intricacies of financial statements, which is crucial for investors, analysts, and management. 
  • Learn how to create an annual statement, decode the complexities of the balance sheet, and understand the importance of cash flow. 
  • Explore real-life examples from the annual reports of sector giants like Reliance Industries, TATA Consumers Limited, and TATA Consultancy Services as your guide.

Topic 2: Accounting Manipulations & Adjustments

  • You will then gain an in-depth introduction to accounting manipulations done by the management and learn how to identify them. 
  • Explore various expenditure adjustments made to the accounting statement. 

Section 2: Analyzing the Fundamentals of a Company

Topic 1: Factors Determining the Value of a Company

  • You will explore the aspects of stock analysis and identify the key factors that affect a company's worth. 
  • Understand various approaches, including technical and fundamental analysis, focusing especially on fundamental analysis, where we evaluate the key factors that influence a company's financial stability and growth potential. 
  • Understand factors such as profits, sales, debt, and overall economic conditions to determine if a stock is overpriced or undervalued.

Topic 2: Valuation & its Types

  • You will understand valuation, its types, and the misconceptions. 
  • Learn about the variety of elements, such as financial performance and industry trends, that contribute to valuation.
  • Explore the concepts used in financial modelling and calculate them with Excel to predict future values and assess investment opportunities.

Section 3: Understanding the Dividend Discount Model

  • You will delve into the Dividend Discount Model (DDM), an essential concept in stock valuation.
  • Thoroughly grasp how to build and carry out the DDM effectively, using practical examples, practise sheets, and reference materials primarily focused on key components such as Beta, Dividend, and Return on Equity. 

Section 4: Understanding the Valuation Theories

Topic 1: Relative Valuation Approach

  • You will understand the Relative Valuation Theory and how it works. 
  • Explore and practice various methods within this approach using the Price to Earning (P/E) Ratio, Price to Book Value Ratio, Price to Sales Ratio and PEG Ratio. 

Topic 2: Discounted Cash Flow (DCF) Approach

  • You will explore the Discounted Cash Flow (DCF) approach. 
  • Understand significant concepts such as Cost of Capital (CoC), Cost of Equity, Risk-Free Rate, Equity Risk Premium (ERP), and Beta. 
  • Wrap up by practicing with reference sheets focused on CoC and ERP, which will help you grasp the concepts better. 

Topic 3: Calculating Discounted Cash Flow

  • You will study how to build a Discounted Cash Flow (DCF) Mode.
  • Understand the three assumptions of this method. 
  • Practice with model sheets and learn to find Sales Growth, Perpetual Sales Growth, and Operating Profit. Additionally, we will analyze the Marico Investor Presentation and HUL Integrated Annual Report.

Section 5: A Case Study on Hatsun Agro Company Valuation

  • In this business valuation course, you will also look at various practical case studies. You will first look at the case study of Hatsun Agro Company's valuation. 
  • Develop the skills needed to evaluate its projected value through an in-depth analysis.
  • This involves understanding economic depreciation, assessing advertising expenditures, calculating borrowing costs, and adjusting capital work in progress. 
  • Learn in detail how to estimate key factors like sales growth, profit margins, and the need for reinvestment. 
  • Learn to forecast the company's performance using the True Value 1342 approach and analyse Hatsun Agro in-depth.

Section 6: A Case Study on India Tobacco Company (ITC) Valuation

  • You will understand a case study that focuses on evaluating the India Tobacco Company (ITC) using in-depth financial modelling. 
  • Discover how to calculate the capital employed, forecast sales growth, compute EBIT margins, and examine the capital employed turnover ratio. 
  • Determine the crucial metrics of the cost of capital and the cost of equity.
  • Using these calculations and insights, you will provide an output based on your study and generate an estimated value report for ITC. 
  • Gain practical experience by analyzing ITC's Annual Report for 2021 and refining your skills using the included worksheets.

Section 7: A Case Study on Nykaa IPO Valuation

  • You will look at a case study on valuing the Nykaa IPO, offering important insights into the initial public offering (IPO) industry. 
  • Learn how to estimate the EBIT margin, calculate capital employed, and determine the cost of capital, all of which are crucial factors in evaluating the value of a company going public. 
  • Using these calculations, you will build a thorough model for Nykaa's IPO and produce an estimated value output. 
  • By reading through Nykaa's IPO Prospectus and practicing with the given worksheets, you will gain real-world experience.
Rounak Gouti

About the Trainer

Rounak Gouti

5150 Learners 4 reviews

Rounak is an Investment commentary writer with almost a decade of experience in equity research.

 

He is a long-term investor managing his family portfolio and has been able to generate returns upwards of 25% CAGR over the last 4 years or so. His investment philosophy is to buy the best of companies managed by promoters or management that have utmost integrity, are hard working and intelligent.

 

 

Know More

What Will You Learn?

  • Understand the concept of stock analysis and know the difference between technical and fundamental analysis.
  • Get a comprehensive understanding of accounting manipulations done by the management and how to identify them.
  • Decode and analyze the Annual Report, Balance Sheet and Cash Flow Statement.
  • Understand valuation, its types, misconceptions, and different factors influencing the derived values.
  • Learn to build financial models of various listed companies using the Dividend Discount Model (DDM), Discounted Cash Flow (DCF) Model and Relative Valuation Theory.

Topics Covered in This Business Valuation Course

  • Understand & Build Financial Model
  • Financial Statement Analysis
  • Methods of Valuation
  • Financial Modelling Case Studies

Intended Participants for This Business Valuation Course

Anyone who wants to gain an in-depth understanding of stock valuation methods, including fundamental analysts, investors and finance professionals.

Get Certified

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Under this course, “Stock Valuation Made Easy”, the participant will be required to appear for the online examination hosted on the website of Elearnmarkets.com. Please note that the participant will get the Certificate of Completion for the course only after passing the Certification Test provided in the course.

 

Procedure:

  • The student has to appear for the Certification Test hosted on the website itself under “Self-Evaluation Test >> Certification Test”
  • In case the student does not clear the Certification Test, they can re-appear the same after 8 hours
  • In case of any further assistance, drop in an email to support@elearnmarkets.com or call: 9051622255

Other Details:

  • Duration:40 minutes.
  • Pattern of questions: Multiple choice-based questions of 2 marks each.
  • No Negative Marking
  • Qualifying marks: 60%

Certificate of Completion:

After successful completion of the online examination, participants need to go to the "My Certificate" tab in Student Dashboard to download the certificate for the respective course.

Rounak Gouti

Instructed By

Rounak Gouti

999

*incl. of Taxes

Frequently Asked Questions

Stock valuation is a method that uses standard formulas to calculate the worth of a company's stock. It determines a financial instrument's fair market value at a particular point in time. The purpose of stock valuation is to forecast future or potential market values so that investors may time the sale or purchase of stocks. It helps investors assess whether a stock is overvalued, undervalued, or priced fairly.
"The three mehtods of stock valuation are: 1. Discounted Cash Flow (DCF): It determines the present value of expected future cash flows, taking into account the time value of money. 2. Price-to-Earnings (P/E) Ratio: It calculates a relative value by comparing the stock's current price to its earnings per share (EPS). 3. Dividend Discount Model (DDM): It determines a stock's worth by calculating the present value of the expected future dividend payments. "
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To post your queries in the discussion forum, follow the steps: Go to the video or the class recording in which you are having doubts >> Click on the Ask a Question icon >> A dialog box will open. Type the topic in which you are having doubt and the specific doubt you are having. Please provide as many details as possible. >> Your query will be answered by our experts soon.
Yes, this is a certification course with lifetime validity.
After successfully completing the examination, participants need to go to the "My Certificate" tab in Student Dashboard to download the certificate for the respective course.
Please reach Team Support at 9051622255. You can alternatively write to us at support@elearnmarkets.com
Please reach program advisor at 9748222555. You can alternatively write to us at info@elearnmarkets.com
Stock valuation is determined through various methods, including absolute valuation models such as the dividend discount model, discounted cash flow model, residual income model, and asset-based model. Additionally, the relative valuation method involves calculating multiples and ratios like the price-to-earnings (P/E) ratio and comparing them with those of comparable companies.
Stock valuation is the process of assessing companies and comparing their current market price to determine whether they are overvalued or undervalued.
The valuation of shares can be determined using various methods, each with its formula. Here are some commonly used formulas: >> P/E Ratio=Share Price/Earnings per share >> Dividend Discount Model (DDM) = D1/(r-g), where P = Stock Price D1 = The value of next year's dividend. r = Constant cost of equity capital. g = Constant growth rate in perpetuity.
The principle of valuation is to determine an asset's inherent worth. To determine the fair value of the shares, various factors, such as the company's financial performance, growth forecasts, industry trends, and market conditions, must be considered.
Stock Valuation helps to determine the fair value of a stock. It allows investors to analyze various stocks to identify ones that may grow over time.

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