Watch the Ratios to make the Sense and beat Pros

1) Liquidity Measurement Ratios - Current Ratio - Quick Ratio - Cash Ratio - Cash Conversion Cycle 2) Profitability Indicator Ratios - Profit Margin Analysis - Effective Tax Rate - Return On Assets - Return On Equity - Return On Capital Employed 3) Debt Ratios - Overview Of Debt - Debt Ratio - Debt-Equity Ratio - Capitalization Ratio - Interest Coverage Ratio - Cash Flow To Debt Ratio 4) Operating Performance Ratios - Fixed-Asset Turnover - Sales/Revenue Per Employee - Operating Cycle 5) Cash Flow Indicator Ratios - Operating Cash Flow/Sales Ratio - Free Cash Flow/Operating Cash Ratio - Cash Flow Coverage Ratio - Dividend Payout Ratio 6) Investment Valuation Ratios - Per Share Data - Price/Book Value Ratio - Price/Cash Flow Ratio - Price/Earnings Ratio - Price/Earnings To Growth Ratio - Price/Sales Ratio - Dividend Yield - Enterprise Value Multiple

When asked about the Balance sheet analysis, Benjamin Graham asks all Investors to be extra Vigil about the Annual Report of the company. The International Norms and other Statutory requirements enforce the Listed Companies, to state most of the above ratios.


Each ratio is notifier and as the term ratio denotes, each of this ratios is a comparison Indicators. The Ratio Analysis basically simplifies the abstract Analysis, and is better Indicative of the underlying.


I will endeavour to briefly explain in 6 Parts in the coming week. 

Indian Vehicle Sales Tumble

In a shocker that reveals how much the recent interest rate hike has bitten into car sales in India—the second fastest growing market for automobiles in the world—data for July this year shows a decline in sales for the first time in over 30 months.

Domestic passenger car sales have registered a 15.76% decline in July this year mainly due to hikes in lending rates and lower production by market leader Maruti Suzuki during the month.

Car sales in the country stood at 1,33,747 units in July, 2011, as against 1,58,767 units in the same month last year, according to figures released by the Society of Indian Automobile Manufacturers (SIAM) today.

"This is the first time since January, 2009, that car sales have fallen. Interest rates and fuel prices were going up in recent months and that led to an overall negative sentiment in the market," SIAM Director General Vishnu Mathur told reporters.

The car market last witnessed a fall in January, 2009, when sales shrunk by 3.16% year-on-year. Last month's decline is the steepest since November, 2008, when car segment sales fell by 19.34%, he added.

The production loss at Maruti's Manesar facility due to preparations for the launch of its new Swift model and realignment of its DZiRE model's output also severely impacted sales, he said.

Earlier this month, Maruti Suzuki India (MSI) said that due to these two planned activities, sales in July were negatively impacted by nearly 17,000 units.

"There is no lack of demand, but just lack of conversion of demand into purchases by customers," Mathur said.

SIAM Senior Director Sugato Sen said non-availability of certain components like castings also impacted the output of many car-makers.

During the month, MSI India posted a 31.04% dip in domestic car sales to 52,483 units.

Rival Hyundai Motor India's sales were down by 11.49% to 25,501 units. Tata Motors saw a decline of 43.13% in sales to 13,997 units during the month.

When asked about the outlook, Mathur said: "Interest rates and fuel prices are challenges for the market. Hopefully, interest rates have reached their peak... If crude continues to soften, then there may be some positive impact as it will lead to inflation coming down."

The forthcoming festive season is also likely to help car-makers push sales, but to what extent it can boost growth has to be looked at, he added.

The auto industry has started slowing down this fiscal, with the passenger car segment growing by only 7% in May. In June, it saw its slowest growth rate in 27 months of 1.62%.

SIAM had last month revised the growth projection downward to 10-12% for 2011-12, as against its earlier forecast of 16-18%.

According to SIAM, two-wheeler sales increased by 12.61% in July, 2011, to 10,56,906 units from 9,38,514 units in July, 2010.

Motorcycle sales grew by 10.51 per cent during the month to 7,85,278 units from 7,10,621 units in the corresponding month last year.

Hero MotoCorp (formerly Hero Honda) continued its impressive performance with a 13.89% increase in sales to 4,43,948 units. Rival Bajaj Auto also posted a 5.30% increase in sales to 2,02,326 units during the month.

However, Honda Motorcycle and Scooter India (HMSI) saw its bike sales falling by 6.52% to 51,920 units. Chennai-based TVS Motor Co saw its motorcycle sales going up by 9.58% to 48,091 units during the month.

The scooter segment witnessed a growth of 23.03% in sales during July this year to 2,05,695 units from 1,67,195 units in the same month last year.

HMSI's scooter sales during the month were up 19.54% to 89,869 units, while that of TVS Motor Co grew by 20.47% to 46,324 units. Hero MotoCorp's scooter sales during the month grew by 36.29% to 33,766 units.

Three-wheeler sales during July, 2011, declined by 3.13% to 43,949 units from 45,369 in the same month last year.

Sales of commercial vehicles jumped by 23.70% to 64,241 units from 51,934 units in the year-ago period.

Light commercial vehicle sales grew by 35.95% to 37,111 units from 27,297 units last year. Medium and heavy commercial vehicle sales stood at 27,130 units as against 24,637 units in July last year, up 10.12%, SIAM said.

Total sales of vehicles across categories registered a growth of 8.99% to 13,48,753 units in July, compared to 12,37,521 units in the same month last year, it added.

Israel and Dubai slump Disney,Retail sales results, China data

The Next Week is entered with Huge Change of Back Drop. The US Sovereign Ratings are cut to AA/+. The Israel Stock Markets opened with a Circuit Halter and ended with about 6 % downside.

This Week the Earlier part, Monday & Tuesday, are field days for US Debt.
Monday : Standard and Poor's releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors. 
This shall include Fannie Mae and Fredie Mac, host of Insurers, Banks , And Pension funds.
This is a Serious Stuff and Investors shall be better off, if they wait for Full Impact.


Tuesdays : FOMC meets and its press statement is ' Generally' expected to Counter the S&P Move.
What FED can Do ? 1) Guidance for Low rates 2) Lower Interest rates 3) Buy Back Programme- QE-3
The Option 2, may undo the market reaction to S&P downgrade.

According to Alan Greenspan, 'the Equity Market shall act negatively. And, the Bottoming out process shall take time.' The Massive impact may usurp latter on, when the Interest Cost will rise and hit the Housing Market.

Value Destruction Phase ?; 
It seems that,  Intra-markets will have contagion effect shall play out. i.e. Rise in Bonds to Affect equities and fall in Equities and both shall trigger a fall in commodities. The Currency Markets, though will Trigger the Market reactions. All though Gold is perceived to be the Beneficiary, the markets may not play accordingly. It might also be affected in short term.

The Latter Week shall follow the Data and US Results, particularly US Consumer giants and Disney.
In Indian Diaspora : Nifty 50 Changes by 2 companies from 8th, Tuesday
L&T, Mahindra & Mahindra, Tata Coffee, Tata Chemical, Aurbindo Pharma, PTC, on Monday, 
J Kumar Infra, ABB , Wockhardt, Tata Comminications, On Tuesday. 
On 10th Wednesday,VIP Industries, TATA Power, REC, IOC, Jubillant are Reporting.
11th has Reliance Infra, JP Power, Tata Motors, Zuari, SPIC, Rolta, Reliance Power, etc.
12the  Friday : Punj Lloyd, Tech Mahindra, TATA Steel, Gammon, JP Infra, Videocon, BPCL, Reliance Mediaworks, Coal India, etc shall be declaring Result.

The List of Economic data is :

Date	Time	Currency	Event	Importance	Actual	Forecast	Previous	Notes
Sun Aug 7			NZD REINZ Housing Price Index (JUL)	Low			3229
			NZD REINZ Housing Price Index (MoM%) (JUL)	Low			1.3%
			NZD REINZ House Sales (YoY) (JUL)	Medium			14.2%
	23:50		JPY Japan Money Stock M2+CD (YoY) (JUL)	Low			2.9%
	23:50		JPY Japan Money Stock M3 (YoY) (JUL)	Low			2.2%
	23:50		JPY Bank Lending Banks ex-Trust (JUL)	Low			-0.6%
	23:50		JPY Bank Lending incl Trusts (YoY) (JUL)	Low			-0.6%
	23:50		JPY Current Account Total (Yen) (JUN)	Low		¥652.8B	¥590.7B
	23:50		JPY Adjusted Current Account Total (Yen) (JUN)	Low		¥961.1B	¥391.0B
	23:50		JPY Current Account Balance (YoY%) (JUN)	Low		-40.1%	-51.7%
	23:50		JPY Trade Balance - BOP Basis (Yen) (JUN)	Medium		¥113.1B	-¥772.7B
Mon Aug 8	00:00		NZD QV House Prices (YoY) (JUL)	Low			-0.9%
	00:30		AUD TD Securities Inflation (MoM) (JUL)	Medium			0.0%
	00:30		AUD TD Securities Inflation (YoY) (JUL)	Medium			2.9%
	01:30		AUD ANZ Job Advertisements (MoM) (JUL)	Low			3.7%
	04:30		JPY Bankruptcies (YoY) (JUL)	Medium			1.5%
	05:00		JPY Eco Watchers Survey: Current (JUL)	Medium		50.0	49.6
	05:00		JPY Eco Watchers Survey: Outlook (JUL)	Medium			49
	05:45		CHF Unemployment Rate (JUL)	Medium		2.8%	2.8%
	05:45		CHF Unemployment Rate s.a. (JUL)	Medium		3.0%	3.0%
	06:30		EUR Bank of France Business Sentiment (JUL)	Low			99
	08:30		EUR Euro-Zone Sentix Investor Confidence (AUG)	Medium		3.4	5.3
	22:45		NZD NZ Card Spending - Retail (MoM) (JUL)	Medium		0.5%	1.2%
	22:45		NZD NZ Card Spending (MoM) (JUL)	Medium		0.5%	0.8%
	23:01		GBP BRC Sales Like-For-Like (YoY) (JUL)	Low		-0.5%	-0.6%
	23:01		GBP RICS House Price Balance (JUL)	Medium		-28%	-27%
Tue Aug 9			GBP NIESR Gross Domestic Product Estimate (JUL)	Medium			0.1%
			CNY Actual FDI (YoY) (JUL)	Medium			2.8%
			EUR German Wholesale Price Index (MoM) (JUL)	Low			-0.6%
			EUR German Wholesale Price Index (YoY) (JUL)	Low			8.5%
	01:30		AUD Home Loans (JUN)	Medium		0.8%	4.4%
	01:30		CNY Producer Price Index (YoY) (JUL)	Medium		7.5%	7.1%
	01:30		AUD Investment Lending (JUN)	Low			4.4%
	01:30		AUD Value of Loans (MoM) (JUN)	Low			2.2%
	01:30		AUD NAB Business Confidence (JUL)	Medium			0
	01:30		AUD NAB Business Conditions (JUL)	Low			2
	02:00		CNY Industrial Production (YoY) (JUL)	Medium		14.6%	15.1%
	02:00		CNY Industrial Production YTD (YoY) (JUL)	Medium		14.3%	14.3%
	02:00		CNY Consumer Price Index (YoY) (JUL)	Medium			6.4%
	02:00		CNY Fixed Assets Inv Excl. Rural YTD (YoY) (JUL)	Medium		25.5%	25.6%
	02:00		CNY Retail Sales (YoY) (JUL)	Medium		17.7%	17.7%
	02:00		CNY Retail Sales YTD (YoY) (JUL)	Medium		17.0%	16.8%
	05:00		JPY Consumer Confidence (JUL)	Medium		37.0	35.3
	05:45		CHF SECO Consumer Confidence (JUL)	Medium		-5	-1
	06:00		EUR German Exports s.a. (MoM) (JUN)	Low		-1.0%	4.3%
	06:00		EUR German Imports s.a. (MoM) (JUN)	Low		-1.5%	3.7%
	06:00		EUR German Current Account (euros) (JUN)	Low			6.9B
	06:00		EUR German Trade Balance (euros) (JUN)	Medium		14.0B	14.8B
	06:00		JPY Machine Tool Orders (YoY) (JUL P)	Medium			53.5%
	06:45		EUR French Central Government Balance (euros) (JUN)	Low			-68.4B
	08:30		GBP Industrial Production (MoM) (JUN)	Low		0.4%	0.9%
	08:30		GBP Industrial Production (YoY) (JUN)	Medium		0.2%	-0.8%
	08:30		GBP Manufacturing Production (MoM) (JUN)	Low		0.2%	1.8%
	08:30		GBP Manufacturing Production (YoY) (JUN)	Medium		2.8%	2.8%
	08:30		GBP Visible Trade Balance (Pounds) (JUN)	Medium		-£-8100	-£8478
	08:30		GBP Trade Balance Non EU (Pounds) (JUN)	Low		-£4800	-£5109
	08:30		GBP Total Trade Balance (Pounds) (JUN)	Low		-£3600	-£4060
	11:30		JPY Machine Tool Orders (YoY) (JUL)	Medium			90.8
	12:15		CAD Housing Starts (JUL)	Medium		195.0K	197.4K
	12:30		USD Unit Labor Costs (2Q P)	Low		2,4%	0.7%
	12:30		USD Non-Farm Productivity (2Q P)	Low			1.8%
	14:00		USD IBD/TIPP Economic Optimism (AUG)	Low		42.0	41.4
	18:15		USD Federal Open Market Committee Rate Decision (AUG 9)	High		0.25%	0.25%
	23:50		JPY BOJ to Publish Minutes of July 11-12 Board Meeting	High
	23:50		JPY Housing Loans (YoY) (2Q)	Low			2.7%
	23:50		JPY Tertiary Industry Index (MoM) (JUN)	Medium			0.9%
	23:50		JPY Domestic Corporate Goods Price Index (MoM) (JUL)	Low		0.0%	-0.1%
	23:50		JPY Domestic Corporate Goods Price Index (YoY) (JUL)	Low		2.6%	2.5%
Wed Aug 10			CNY New Yuan Loans (JUL)	High			633.9B
			CNY Money Supply - M0 (YoY) (JUL)	Low			14.4%
			CNY Money Supply - M1 (YoY) (JUL)	Low			13.1%
			CNY Money Supply - M2 (YoY) (JUL)	Low			15.9%
			GBP Nationwide Consumer Confidence (JUL)	Medium			51
	00:30		AUD Westpac Consumer Confidence s.a. (MoM) (AUG)	Medium			-8.3%
	00:30		AUD Westpac Consumer Confidence Index (AUG)	Low			92.8
	01:30		AUD Retail Sales Ex Inflation(QoQ) (2Q)	Medium
	02:00		CNY Trade Balance (USD) (JUL)	Medium		$27.40B	$22.27B
	02:00		CNY Exports (YoY%) (JUL)	Low		17.0%	17.9%
	02:00		CNY Imports (YoY%) (JUL)	Low		22.0%	19.3%
	06:00		EUR German Consumer Price Index (MoM) (JUL F)	Medium		0.4%	0.4%
	06:00		EUR German Consumer Price Index (YoY) (JUL F)	High		2.4%	2.4%
	06:00		EUR German Consumer Price Index - EU Harmonised (MoM) (JUL F)	Medium		0.5%	0.5%
	06:00		EUR German Consumer Price Index - EU Harmonised (YoY) (JUL F)	High		2.4%	2.4%
	06:45		EUR French Industrial Production (MoM) (JUN)	Low			2.0%
	06:45		EUR French Industrial Production (YoY) (JUN)	Low			2.6%
	06:45		EUR French Current Account (euros) (JUN)	Low			-5.5B
	06:45		EUR French Manufacturing Production (MoM) (JUN)	Low		-0.1%	1.5%
	06:45		EUR French Manufacturing Production (YoY) (JUN)	Low		6.8%	5.4%
	09:30		GBP Bank of England Inflation Report	High
	11:00		USD MBA Mortgage Applications (AUG 5)	Low
	14:00		USD JOLTs Job Openings (JUN)	Low			2974
	14:00		USD Wholesale Inventories (JUN)	Low		1.0%	1.8%
	14:30		USD DOE U.S. Crude Oil Inventories (AUG 5)	Low
	14:30		USD DOE Cushing OK Crude Inventory (AUG 5)	Low
	14:30		USD DOE U.S. Distillate Inventory (AUG 5)	Low
	14:30		USD DOE U.S. Gasoline Inventories (AUG 5)	Low
	14:30		USD DOE U.S. Refinery Utilization (AUG 5)	Low
	18:00		USD Monthly Budget Statement (JUL)	Medium		-$140.0B	-$43.1B
	22:30		NZD Business NZ Performance of Manufacturing Index (JUL)	Medium			54.3
	23:50		JPY Machine Orders (MoM) (JUN)	Medium		1.8%	3.0%
	23:50		JPY Machine Orders (YoY) (JUN)	Medium		11.3%	10.5%
	23:50		JPY Japan Buying Foreign Bonds (Yen) (AUG 5)	Low
	23:50		JPY Japan Buying Foreign Stocks (Yen) (AUG 5)	Low
	23:50		JPY Foreign Buying Japan Bonds (Yen) (AUG 5)	Low
	23:50		JPY Foreign Buying Japan Stocks (Yen) (AUG 5)	Low
Thu Aug 11	01:00		AUD Consumer Inflation Expectation (AUG)	Low			3.4%
	01:00		NZD ANZ Consumer Confidence Index (AUG)	Low			109.4
	01:00		NZD ANZ Consumer Confidence (MoM) (AUG)	Low			-2.3%
	01:30		AUD Employment Change (JUL)	High			23.4K
	01:30		AUD Unemployment Rate (JUL)	High			4.9%
	01:30		AUD Full Time Employment Change (JUL)	Medium			59.0K
	01:30		AUD Part Time Employment Change (JUL)	Medium			-35.6K
	01:30		AUD Participation Rate (JUL)	Low			65.6%
	08:00		EUR ECB Publishes Aug. Monthly Report	High
	12:30		CAD New Housing Price Index (MoM) (JUN)	Low		0.3%	0.4%
	12:30		CAD New Housing Price Index (YoY) (JUN)	Medium		2.1%	1.9%
	12:30		CAD International Merchandise Trade (Canadian dollar) (JUN)	Low			-0.8B
	12:30		USD Trade Balance (JUN)	Medium		-$48.0B	-$50.2B
	12:30		USD Initial Jobless Claims (AUG 5)	Low		401K	400K
	12:30		USD Continuing Claims (JUL 30)	Low		3725
	13:45		USD Bloomberg Consumer Comfort (AGU 7)	Low
	14:30		USD EIA Natural Gas Storage Change (AUG 5)	Low
	22:45		NZD Retail Sales Ex Inflation (QoQ) (2Q)	Medium			0.9%
Fri Aug 12	03:00		NZD Non Resident Bond Holdings (JUL)	Low			61.4%
	04:30		JPY Industrial Production (MoM) (JUN F)	Low
	04:30		JPY Industrial Production (YoY) (JUN F)	Medium
	04:30		JPY Capacity Utilization (MoM) (JUN)	Low			12.8%
	05:30		EUR French Consumer Price Index - EU Harmonised (MoM) (JUL)	Low		-0.3%	0.1%
	05:30		EUR French Consumer Price Index - EU Harmonised (YoY) (JUL)	Low		2.3%	2.3%
	05:30		EUR French Consumer Price Index (MoM) (JUL)	Low		-0.3%	0.1%
	05:30		EUR French Consumer Price Index (YoY) (JUL)	Low		2.2%	2.1%
	05:30		EUR French Consumer Price Index Ex Tobacco Index (JUL)	Low		122,19	122.49
	05:30		EUR French Gross Domestic Product (QoQ) (2Q P)	Low		0.3%	0.9%
	05:30		EUR French Gross Domestic Product (YoY) (2Q P)	Low		2.0%	2.2%
	06:45		EUR French Non-Farm Payrolls (QoQ) (2Q P)	Low			0.4%
	06:45		EUR French Wages (QoQ) (2Q P)	Low			1.0%
	08:00		EUR Italian Trade Balance (Total) (euros) (JUN)	Low			-2407M
	08:00		EUR Italian Trade Balance Eu (euros) (JUN)	Low			-600M
	09:00		EUR Euro-Zone Industrial Production s.a. (MoM) (JUN)	Low		0.0%	0.1%
	09:00		EUR Euro-Zone Industrial Production w.d.a. (YoY) (JUN)	Medium		4.2%	4.0%
	09:00		EUR Italian Consumer Price Index (NIC incl. tobacco) (MoM) (JUL F)	Low		0.3%	0.3%
	09:00		EUR Italian Consumer Price Index (NIC incl. tobacco) (YoY) (JUL F)	Low		2.7%	2.7%
	09:00		EUR Italian Consumer Price Index - EU Harmonized (MoM) (JUL F)	Low		-1.7%	-1.7%
	09:00		EUR Italian Consumer Price Index - EU Harmonized (YoY) (JUL F)	Low		2.1%	2.1%
	12:30		USD Advance Retail Sales (JUL)	High		0.5%	0.1%
	12:30		USD Retail Sales Less Autos (JUL)	Medium		0.2%	0.0%
	12:30		USD Retail Sales Ex Auto & Gas (JUL)	Medium		0.2%	0.2%
	13:55		USD U. of Michigan Confidence (AUG P)	High		63.0	63.7
	14:00		USD Business Inventories (JUN)	Medium		0.6%	1.0%