Corporate Governance
Module Units
- 1. Introduction
- 2. The Two Thin Lines
- 3. Governance 101
- 4. Principles of Corporate Governance
- 5. Corporate Governance in the Indian backdrop
- 6. FAQs on Corporate Law & Governance
- 7. Landmark Corporate Governance failures in India – Yes Bank
- 8. Corporate Governance failures in Satyam Computers
- 9. Corporate Governance failures in IL&FS
- 10. Corporate Governance failures in Jet Airways
- 11. How to analyze the management of a Company?
- 12. Step 1- Check Promoter Background
- 13. Step 2- Promoter's Salary
- 14. Step 3- Related Party Transactions
- 15. Step 4- Warrants
- 16. Step 5- Management's focus on share price
- 17. Step 6- Dividend Payments
- 18. Step 7 - Accounting Juggernauts
- 19. Step 8- Management Competence
How to analyze the management of a Company?
This writeup will discuss the key steps/tools that investors can use to find companies with good management & avoid bad management. One must read this carefully & inoculate them in his/her stock analysis process so as to avoid falling into the trap of unethical management that benefits at the expense of minority shareholders.
"In evaluating a common stock, the management is 90%, the industry 9%, and all other factors are 1%. "
- Phil Fisher, Path to wealth through common stocks
Investors would acknowledge that it is the management alone that acts as the 100x catalyst
Simple steps to do Management Analysis:
- Promoters’ background check
- Promoters’ salary
- Related party transactions
- Warrants
- Management's focus on stock price
- Dividend payments
- Accounting juggernauts
- Competence
We will elaborately discuss each step in the subsequent sections.
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