How to pick stock

 Some hacks that help in quick analysis of a company:

• DuPont Analysis 

• Common Size Statement

How? Let's find out ⤵️

▣ DuPont Analysis

It tells us how the ROE of the company is achieved.

It may be due to an increase in profit margins (which is a good sign✅) or an increase in debt (which is a bad sign⚠️).

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▣ Common Size Statement

One cannot compare apples to oranges. 

Same way when we compare any companies, we have to compare them based on their margins and not the actual figure of profit or expenses.

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Common size statement shows every item of profit and loss or balance sheet as a % compared to sales and assets respectively. 

➡️ It makes comparing compa

nies easier. 

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