Mutual Funds

Money Wise With Smart Alex – Part 3: How Pratik learns to read companies’ financial statements over tea and biscuits

Is Washington the Promised Land for tea houses? Shyam Sundar Washinton Return Ji, the owner of such an enterprise, can testify otherwise. With a loyal clientele, his establishment is thriving back home. Can a tea stall be the prototype for a listed company?

The many metrics that can be used to gauge the performance of a company can be found in its balance sheet. The first port of call for prospective investors in a company is its annual report. By digging into the financial statement of the business over the past year, its performance can be quantified, and also the future trajectory of the company, estimated. Diligence on the part of investors can go a long way in ensuring healthy returns.

In the previous episode, Pratik took baby steps in his quest to gain financial literacy. To make amends for an earlier miscalculation, he picked up the concept of compounding, and how it can be used to make his hard-earned money work hard for him.

In this episode, he discovers how efficient investing involves studying the financial health of companies. Will he be able to remedy the malady that has plagued his finances since his earlier misstep?

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