April 20, 2007

Company analysis worksheet and valuation template

I have received several requests for my company level valuation template. Instead of responding individually to each of the request, I am posting it in the ‘My analysis worksheet section’ (see here)

The company level analysis worksheet is still a work in progress and I will keep uploading updated versions in the future. I use this worksheet as I detailed it
here in an earlier post, for a detailed analysis of a company once it has passed through the basic filters.

I am also uploading the worksheet which I created for gujarat gas limited in 2003 (see
here). I have since then, bought and liquidated my holding. I will upload more of such worksheets in the future.

In addition, I am also posting a quantitative worksheet. This worksheet has some quantitative analysis of the relationship between PE, ROC and Competitive advantage period. It has a similar analysis of the relationship between FCF (free cash flow), ROE and depreciation (see


Vidyanshu said...

Hi Rohit,

You have shared quite a bit of your knowledge. I hope its been as worthwhile doing this as it has been to the readers of this blog.

I had a question. I read somewhere that Munger had made a comment that he had never seen Buffett do a DCF or use a spreadsheet. Secondly, even in Dhandho Mohnish makes the point that the whole process had to be very simple and the thing should leap at you...else, give it a skip.

Which makes me suspect that the whole process is probably very simple, at most some ratios..and if the whole thing was made even the slightest complex there would be a danger of losing the forest for the trees as it were...

What do you think?


Rohit Chauhan said...

Hi vidyanshu

buffett, munger and pabrai are top investors. they have a very indepth understanding of business and i think for them DCF or any other valuation must be kind of automatic ...sort of intuitive

buffett is said to have done complex calculations in his head which requires others days at end

however i am light years away from that level of expertise. at the same time i think relying on ratios alone is not a good idea

personally for me, the reason for doing a DCF and having a template is to enforce discpline. doing that exercise makes me look at my assumptions closely and do a better analysis.

however as i have analyse more and more companies, i have come to realise that i really do not need the DCF calculation much. However i still end up doing it sometime to get a better picture of the underlying drivers of the cash flow (such as costs, depreciation , capex etc).

frankly, i would not take buffett and others statement at face value. what is easy for them is sometimes not even comprehensible for us