1. Compare relative to
   1. Check Year over Year
   2. Competition
   3. Industry avg
2. Valuation Statistical Analysis
   1. Net Present Value
      1. (of future Cash flow)
   2. Liquidity position
      1. Price to Book Value
         1. P/BV values represent
            1. Overvalued [> 1]
            2. Accurately values [~1]
            3. Undervalued [< 1]
      2. Current Ratio
         1. Assets divided by Liabilities
            1. CR [Assets include Inventories and Receivables]
            2. Acid Test ratio
            3. AT [Assets exclude Inventories and Recevables]
   3. Interest to Coverage
      1. I/C = EBIT divided by Interest Expense
         1. Estimated number of Interest payments serviceable from Operations
   4. Price to Earnings
      1. Most applicable to mature, stable, profitable businesses
      2. PEG := P/E divided by Growth Rate (Estimated)
      3. P/E values represent
         1. High
            1. Valuation may be high
            2. High Earnings growth expected
            3. Check for Debt increased
         2. May be skewed by large earnings driven by debt
3. Overview Ratio Analysis based on Growth Rates
   1. Return on Equity (RoE)
   2. Return on Invested Capital (RoIC)
      1. Includes all sources (i.e., Debt, Equity)
   3. Earnings Year over Year (E(YoY))
      1. Criteria for this assumes CAGR 6-7%
   4. Earnings per Share (EPS)
      1. Profitability
   5. Net Sales (NS)
      1. Sales volume trend
   6. Book Value per Share (BVPS)
      1. Offerings Demand trend
   7. Criteria
      1. Very Good [> 12%]
      2. Mediocre [8% - 12%]
      3. Poor [< 8%]
4. Earning capacity Statistical Analysis
   1. Enterprise Value by Earnings before Interest, Tax, Depreciation and Amortization
      1. EV/EBITDA values represent
         1. Lower indicates likely Undervalued
         2. Industry growth
      2. Most applicable to businesses which have incurred significant debt.
   2. Earnings before Interest but after Tax
      1. Indicates solvency
5. References
   1. 10 Things An Investor Must Do Before Investing, Forbes 3 Mar 2014
      1. Talk with the CEO
      2. Diversify Investments
      3. Talk to a SME
      4. Talk to Customers
      5. Understand Growth
      6. Know the Exit Strategy
      7. Consult your Lawyer
      8. Understand the Business
      9. Calculate per-sale economics
      10. Know the Deal
   2. Angel Performance Project Presentation
   3. Key Financial Ratios You Must Look at Before Making an Investment, Money Today Sep 2014
   4. How to Decide Whether a Company is worth Investing in or Not? Money Works 4 Me, 2 Feb 2010.
6. Detailed and Comprehensive Statement reviews
   1. Profit & Loss Stmt
   2. Balance Sheet
   3. Cash Flow Stmt
   4. Check for Statement manipulations
      1. Change in FY
      2. Extraordinary items
      3. Bonus issues
      4. Stock splits
7. Profit opportunities
   1. Share price appreciation
   2. Dividends
   3. Dividend Yield
      1. DY := Div divided by Share Price
         1. Generally,the higher the better
         2. High may be over- inflated
            1. $0.01 stocks
            2. One-time gains
            3. Excess unused cash
         3. Low may be under- inflated
            1. High investment of profits
8. S-W-O-T Analysis
   1. Strengths
      1. Operating Profit Margin
         1. OPM := Operating Profit divided by Sales
   2. Weaknesses
      1. Debt to Equity
         1. D/E values generally
            1. High may indicate investment in multiple projects with High
            2. The lower the better
            3. Positively correlates with Credit Default Risk level
      2. Debt per Net Profit
         1. D/NP values represent
            1. < 1 Very Good
            2. 2-3 Mediocre
            3. 4+ Poor
   3. Opportunities
      1. Unmet Demand
      2. Inefficient Supply
   4. Threats
      1. Risks
         1. Credit Default