1.1 – Unusual approach

We are all living in a very uncertain and unprecedented time. Covid 2nd wave has been brutally devastating and has caused a lot of pain and misery to humanity. I hope you are your family are staying safe. Please double mask if you really have to step out. I hope humanity does not have to face this situation ever again, and we get out of this situation as quickly as possible.

Let me start this module on Financial Modelling with an apology. I know this module was due for a while now. I know, I’ve taken a lot of time to get started on this. There were multiple reasons for the delay, but that’s all behind now. Here we are, all set. I’m super excited to deliver this module, and I hope you are excited as well 😊

But there are a few things to note before we get started –

Financial modelling as a subject is taught either in the classroom or in a Β video format. There is a reason for this – while teaching this subject, at any given point, we tend to open up multiple threads and then tie it all together in the end. So in a sense, there are hops, jumps, crisscrossing, and a bit of number juggling. Given the nature of this subject, it makes sense to teach this online or via a physical classroom setup.

Think of it as producing a movie. I’m sure you understand that a movie is not shot scene after scene in a sequential manner. Different scenes are shot, songs are recorded, action scenes are shot, edited, and then patched together and eventually made to look like the entire movie was show scene after scene.

In a sense, financial modelling is very similar.Β  You will understand this better as we dig deeper.

I don’t know if financial modelling is taught in the classic article format. I could make a huge mistake attempting this task, but I think it is worth the shot.

As I just hinted above, the learning won’t be sequential. We will have multiple threads open; numbers will crisscross and move from one sheet to another, adding to the non-sequential learning format. But that’s the way this will go, so please be prepared for it.

As we progress through, you will realise that Financial Modelling is more of an art form than financial science. We throw in a ton of assumptions while building any financial model. The assumptions may vary from person to person based on the individual’s experience.

However, the good part is that the model we create will very easily accommodate changes and updates; this flexibility makes financial modelling a beautiful endeavour.

1.2 – What are you learning and why?

Perhaps an essential question – what is β€˜Integrated Financial Modelling’, and why do we need to learn this?

Think about a typical company; as you can imagine, the company can have several moving parts. For example, a manufacturing company can have a team procuring raw materials, workforce to manufacture goods, admin team, finance team, regulators, compliance, marketing, supply chain, distribution, R&D, and whatnot.

Given the enormity, how do you break a company down into smaller parts and gain meaningful insights into its functioning? Β How do we gauge its efficiency?

Well, this is where financial modelling comes into play. Eventually, whatever the company does, it all boils down to numbers and metrics.

For example, successful operations lead to revenue generation, successful cost management leads to operating profits. Good financial practice leads to manageable debt levels; good supply chain management leads to better inventory management. Good dividend policy strikes a balance between a company’s growth and shareholder value. So on and so forth.

So the approach we take here is that if we can systematically analyze the numbers presented in the financial statements, perhaps it opens up a window to understand the company better.

When I talk about understanding financial statements, I’m talking about getting into granular details; we go line by line. Many often assume that a series of simple financial ratio analysis results in great insights into the company. Yes, to some extent, it does, but we can do a lot more to better understand the company.

Better understanding leads us to a better insightful investment decision.

Think about Financial modelling as a systematic way to understand the company. Here is what the name, β€˜Integrated Financial Modelling’, means –

Financial = Indicates that we are working with the company’s financial statements

Modelling = Indicates that we are laying down a company’s financials systematically, connecting these financial statements and subjecting the same to a bunch of equations. The entire thing tied together is called a model, Β a model with specific input (financial statements) and a specific output (valuations).

Integrated = Implies that all the numbers are interconnected, and no part of the financial model is isolated. You will understand this better as we progress through building the financial model.

The end objective of any financial model is to help you build a perspective of valuation. The final output of the financial models is the company’s share price after factoring in everything that matters. You take the share price from the model, compare the share price against the market share price, and figure if the stock is fairly valued, undervalued, or overvalued.

The ultimate satisfaction is when you know that the stock is undervalued and available for a throwaway price in the market, trust me on that 😊

1.3 – Tools of the craft

Let me break the β€˜not so good news’ first – to learn, build, and benefit from a financial model; it is mandatory to have some background knowledge about the following –

    • How to read an annual report
    • How to read the financial statements of the company – Balance Sheet, P&L, Cash Flow
    • It would be best if you were comfortable working with MS Excel or any other software similar to MS Excel

The good part is that you can learn how to read the annual report, Balance sheet, P&L, and Cash flow in the fundamental analysis module.

Unfortunately, we don’t have a module on MS Excel, so please try and self-study MS Excel. If you are uncomfortable with any of the three topics mentioned above, please stop right now and learn these things before learning Financial Modelling.

Please do note, when I say you need to know how to read financial statements, I only mean that you need to know this from a user’s perspective. As long as you know the basics, that is good enough.

The same goes with Excel. It would help if you were good enough with essential functions and formats. I don’t expect you to have the knowledge required to build a complicated dashboard on excel.

The good news is that when I decided to learn Financial Modelling, I had no clue about the three things I mentioned above. I had to learn these things first and then get back to financial modelling. If a person like me can do this, then I’m confident anyone can.

By the way, financial modelling as a concept can be applied to any part of market finance, be it investing or derivatives trading. Financial modelling is nothing but a structured way of thinking through a complex problem; some even call this β€˜Design thinking’ of sorts.

If you are a regular reader of Varsity, we have dabbled with Financial Modelling in the module related to Risk management and in the Trading systems module. It’s just that we never called it β€˜Financial Modelling’.

This module, however, will be focused on Fundamentals and Financial Modelling for investments.

1.4 – The steps involvedΒ 

At this point, I’d like to share with you a brief overview of the steps involved in creating an integrated financial model. These steps only give you a sense of direction. We will dig deeper into each of these steps as we proceed.

These are the steps involved in building a financial model –

Set up a layout – Perhaps the most crucial aspect of financial modelling. I foresee myself stressing on this several times throughout this module, so bear with me. Β A typical Financial model will have multiple excel sheets within a single workbook. We need to ensure our Excel workbook is appropriately indexed and formatted and the format stays consistent across the entire model.

For example, if I’m dealing with 2018 data in column β€˜E’ of my excel sheet, I’ll ensure that column E across all the other sheets will always deal with 2018 data. Or here is another example of the layout, column A and B will be shrunk to ensure easy indexation across all the sheets.

At this point, this may come across as a bunch of vague statements, but you will appreciate these points as we progress along.

Historical Data – A rather painful task, but this need to be done. We need to download the Annual report of the company we are dealing with, preferably for the last five years. We need to extract the balance sheet and P&L data from the annual report and input this in our excel sheet. Of course, we will be dealing with consolidated numbers here and not standalone data.

Most importantly, please use the annual report as your primary data source and not any other 3rd party data vendors.

Assumption Sheet – Remember I spoke about financial modelling as an art form rather than financial science? Well, we create an assumption sheet and dump all our assumptions in one sheet here. We assume things about the company should be close to reality; the further we go from reality, Β the more distorted our model gets. Let me give you an example.

Suppose a company’s revenue is growing at 7% year on year for the last five years; what do you think will be the growth rate for the 6th year? If we have to assume something, it has to be in the region of 7%, unless you foresee a significant change. Anything higher or lower will distort the P&L from reality.

Asset and other schedules –Throughout the model, we create something called a β€˜schedule’. We create a schedule with oversized line items. For example, the asset schedule deals with plants, machinery, and all the company’s fixed assets. We lay down the numbers in a systematic way and deal with them. For example, we extract the gross block number, depreciation, netblock, and even the CAPEX figures in the asset schedule.

So a single schedule gives us insights into multiple aspects of the company.

Like the asset schedule, we create other schedules such as – reserves schedule and the debt schedule.

Projections – Once the assumptions are complete and the schedules, we project the balance sheet and P&L for either 3 or 5 years forward. This is one of the crucial steps while building the model.

Cashflow derivation – Again, a very crucial step in financial modelling. In this step, we derive the cash flow statement using the P&L and Balance sheet data, called the β€˜indirect method’, of cash flow preparation. Note, unlike the Balance sheet and P&L data, historical data of cash flow is not extracted from the annual report but instead derived. This step can be tricky; it sometimes works and sometimes does not work due to its complexity.

Hence we will also look at alternatives here.

Ratios – Once all the data is in place, we can quickly draw up ratios and charts for our model. The ratio sheet will include things like liquidity, solvency, profitability ratios etc.

Valuations – In the valuation sheet, we deploy the discounted cash flow method of valuation and finally value the company. Think of this step as including a model within a model. Of course, we will have sufficient checks and balances in places to ensure we are not going way off the mark, and even if we do, the sensitivity tables that we develop should help us get back on track.

These are roughly the steps involved in developing a full-fledged integrated financial model. While it makes it seem simple, trust me, it is not.

I’m excited to dig deeper. I hope you are too, so buckle up for the ride 😊

Key takeaways from this chapter

    • A financial model takes in inputs in the form of financial statements and gives us an output mainly in terms of valuations
    • Financial modelling involves a non-sequential learning path
    • Multiple discussion threads open up while building a financial model
    • Basic working knowledge of MS Excel, Balance Sheet, P&L, cashflow is mandatory before venturing into financial modelling
    • There are 7-8 steps to follow while building a financial model
    • The model that we build has to be flexible to accommodate changes and updates.



322 comments

  1. Sundeep says:

    Sir finally the module is here and I am super excited as well.
    I am starting to think this might be your most personal module yet.
    Anyways sir. Looking forward to more modules soon. \

    Thank you.

  2. Vishal puri says:

    I like this varsity initiative it’s much more usefull then expensive financial books and easy to understand

  3. Yerra V S N Sai Sudheer says:

    Game on!!!!

  4. kinshuk jain says:

    Please make a module on market cycles and algorithmic trading.

  5. Sidharth says:

    Excited to learn this. Hopefully this will make me a better investor.

  6. Viswanathan Viswanathan says:

    Dear sir
    Me too interested in your modules, already I am going through varsity.
    Please help us to go further deep company share prices and forecast.

  7. Harish says:

    Super excited to learn from zerodha varsity. Thanks to you and your team.

  8. Vaishnavi says:

    Your writeups are easy to grasp. Thank you for the module πŸ™‚

  9. Aman Thakur says:

    Well sir, hats off to you s….you made our day.. especially for those who all are daily go through varsity for new stuff…sir I am core Marine engineer deals with big engines in the ocean ..but I have been following you and varsity for last three years and you mould me like that I can deal with financial aspects that are required for investment . I only want to say that best teacher teaches from heart not from books..and you are best………….god bless you sir.

    • Karthik Rangappa says:

      Thanks for the super kind words, Aman. Encouraging words like these keeps us going πŸ™‚

  10. Shreyansh Mehta says:

    Looking forward for the module. Will help thoroughly in personal business as well as in fundamental analysis

  11. Sunny says:

    Thankyou so much sir, for initiating the great Module again.
    I’m Ready to witness again simplest explanation of complex Topic.

  12. Alok Gupta says:

    Thankyou so much sir. This module will be a game changer in my journey of investing. Thanks again.

    I would really like to know the exact date of releasing of this module. Also whether it will be released chapter wise or all at once?

  13. Shubham Horambe says:

    Hope to learn a lot from this module. Thankyou Karthik

  14. RAMANATHAN SESHAN says:

    Thank u sir.
    What is the periodicity of aticles

    • Karthik Rangappa says:

      As and when I finish a chapter, I’ll upload it. Unfortunately, I cannot place a timeline for this.

  15. J. Scott says:

    I really am embazaled by your think-topic. Please write something about excel sheet and how companies are using excel sheet to make their p&l statement.

  16. Arpit says:

    Hi Team, Somehow this module in not available in the Android app. It still shows as ‘Coming Soon’. I like to track my reading progress so it would be great to see this module in the app as well.

    Thanks in advance! – Arpit

  17. sandesh shetty says:

    Hi Karthik,

    Looking forward to digging deeper into this module. Once again, thank you for all your effort.

    Anyway, may I know the frequency of new posts for this module? Is it weekly one post? Also, how many chapters will this module contain?

    Thanks
    Sandesh Shetty

    • Karthik Rangappa says:

      The chapter will be updated as soon as I finish writing the same, unfortunately its hard to put a time line to this πŸ™‚

  18. Cv ratnababu says:

    I am interested to know more about this course

  19. Shiv Yadav says:

    Thanks Karthik, this is very helpful.

  20. SS says:

    Any knowledge is good knowledge if you get benefited from it in any manner πŸ™πŸ™

  21. Nitin Acharya says:

    Mr Rangappa, waiting eagerly for the rest of the modules.

    • Karthik Rangappa says:

      Sure Nitin, the chapters will be updated as soon as I finish writing the same, unfortunately, its hard to put a timeline to this

  22. Jayant Sharma says:

    Hi Karthik,

    Tbh, I was trying to build the model on my own for the last few days and failing badly.
    Now that I have you as an expert, I am sure it will get built just fine.
    Thank you for sharing your knowledge with the rest of us.
    Appreciate it!

  23. Abhay says:

    Finally you posted this .πŸ‘ŒπŸ‘ŒπŸ‘Œvery well explained

  24. Vinay says:

    Zerodha Has to be the Best broker in terms of Everything. They connect to their customers and are not Money oriented as per my experience. This has to be the best and Easy to understand course on the Stock markets and Finance that too free of cost. A big thanks to you @KarthikRangappa and Other members of Zerodha for being a customer centric business

  25. A Uday Bhaskar S Murthy says:

    Whatever the model introduced by Zerodha will be professional and easy to understand even to non domain persons . Eagerly looking forward for this module.
    Tq

  26. Deepak Jha says:

    I think Varsity will soon become university in itself…..after this module….all money minting courses will shut down to some extent…..

  27. Chhatra Ram says:

    Thank you so much Kartik sir, Nitin sir, and whole team

    I like so much zerodha because of their founders. Zerodha is a customer centric business, they are not money oriented people as per my understanding.

    • Karthik Rangappa says:

      Thanks for the kind words, we try to do our best and help our customers in whichever way possible. I hope you continue to enjoy reading this module.

  28. Hamzu says:

    I’m extremely excited about this module. The only free resource on the internet I value more than paid resources. Thanks, Sir.

  29. Vibhore Gupta says:

    I am doing a separate course on financial modelling however after getting to know that you’re bringing this module I’m really excited to read it asap.

  30. Anant says:

    Thank You so much for this module. Will be able to learn Financial Modelling in a different way.

  31. Smita says:

    HOT!!!

  32. Maria says:

    Hey Kartik,
    Which one is better trading or investing in derivative market(option or future)….

  33. Yash Rastogi says:

    That’s the module I was waiting for.
    Thank u so much sirπŸ™

  34. Grishma Garg says:

    Excited to learn more about financial modeling.
    When will the next chapter be uploaded?

  35. Shubham Jain says:

    I don’t see any module in varsity w
    Of financial modeling.. please guide.also tge coming soon module is module no 12..Where is module no.11

  36. Mandira Rakshit says:

    Hope you and your family members are safe in this pandemic situation. I would like to thank you from bottom of my heart for organizing those wonderful modules. Hats off Sir..

    • Karthik Rangappa says:

      Thanks so much Mandira. Yes, my family is keeping safe. I hope the same with yours πŸ™‚

  37. Shikhar says:

    Thank you so much for everything sir. Way excited for this one.

  38. Arvind Charan says:

    Hello sir,
    I am a very new investor in my mid-twenties and just like thousands others, I have also started investing in stock markets in the lock down. I am yet to go through all of your literature. [completed five :)]. I just want to say that your content is a gold mine, along with occasional ‘investopedia’. Hence I would like to thank you, very much.
    Also why haven’t Varsity made any videos? I believe they maybe helpful too. Just saying, not criticizing ;). Good luck sir, and thank you.

    • Karthik Rangappa says:

      Thanks for the kind words, Arvind. The only reason for not venturing into videos is the format. I like to explain things in a long format, this ensures that I don’t leave any details out. Videos cant be that length, it not just bores the viewer but also costs a lot to produce. However, that said, we are looking into what we could do about that πŸ™‚

  39. Kallol Sen says:

    Sir, I can’t wait, I am eagerly waiting for your next content, I am learning Stock Market from versity since 2.5 years and able to implement those concept, as a result it gives huge differences. A little bit suggestions from my side is that, if you dig more on microeconomics from RBI website and show us how to use those data then it would be additional beneficiary for us.

    • Karthik Rangappa says:

      Thanks for that, Kallol. Yes, I’d like to do that as well. Maybe in the next module on Personal finance.

  40. RAVI RAJA says:

    I am so excited and can’t wait to complete this module as well. You are amazing Karthik Rangappa. Cheers to learning with Zerodha Varsity.

  41. Arun says:

    Hello

    can you tell me what’s your thought process behind not using data from other sources. It is very much required to go through annual statement while valuation for proper projection but what’s the drawback of taking annual statement data from other sources(Like exchanges,refinitive,Bloomberg,prowees iq etc.). Sir another thing i am little bit confused when to take consolidated and when to take standalone as sometime some analyst take into consideration standalone(if standalone operation is the major revenue driver).

    Another request – sir i commented several thing in several sections and you replied to that also precisely. But finding that and clarifying my doubt is quite difficult as searching is also quite difficult. Can you assign login id and password so that we can track our progress and doubt. And if needed attach some notes also.

    • Karthik Rangappa says:

      Arun, a financial model is riddled with assumptions. So given this, you don’t want the data to come from 3rd party sources which may have modified to fit a certain format, which may have other assumption. So to keep it clean, use the data from the AR. Besides, taking data from AR also means that you’d be reading the notes, which has valuable information.

      I’d always use consolidated data, I never really use the standalone data Arun.

      About the comments, I know this is an issue, I’ll see what best I can do.

  42. Jay shudra says:

    I like the zerodha effort to increase the financial literacy. The explanation given in all modules are lucid and clear. I would like to say thanks to sir Karthik for sharing the valuable knowledge.

  43. Manish Kumar says:

    Excited for this one

  44. Shirish Nayak says:

    So excited to start reading this series. Have you planned on how many chapters you are trying to make in this series? Thank you so much for all the valuable information which you have been providing since years πŸ™‚

  45. Arvind bharati says:

    When will you introduce complit financial modeling and algorithm trading ?

  46. Rajnish Chandan says:

    Sir,

    I would like to thank you for creating such a useful content , it’s very good initiative for students/new traders/all in general to get market in-depth knowledge from your pdf (module).

    Thanks,
    Rajnish

  47. Praband says:

    Why this module didn’t included in varsity app yet ?

  48. Radha says:

    Hearty Thanks for bringing this with so much clarity again. This will definitely bring more clarity and enthusiasm.

  49. sanjay says:

    the way you are helping retail trader/investor much appreciated sir. God bless you and your team sir.

  50. Guruprasad Bhagwat says:

    when we will get all the content on the chapter?

  51. Siva says:

    Very exited on reading the Introduction and most exited for its further chapters. Thank you for this wonderful efforts.

  52. Mohit Jain says:

    Thank you so much sir for starting this module:) truely grateful to you and team zerodha for spreading financial knowledge in a simplified manner!
    I had a doubt about the calculations of FCFF, if you can answer that-
    The formula for FCFF(starting from net income) is- Net income + Depreciation+/- Working capital changes+ Interest*(1- tax rate) +/- Capex invesments
    So, in the capex part do we have to subtract out the depreciation here or we should include the capex without depreciation?

    • Karthik Rangappa says:

      Mohit, yes, you need to deduct the CAPEX. I’ll discuss this more as we move ahead πŸ™‚

  53. Devojeet Barick says:

    finally the beast is here.. just curious to ask will be detailed how to do financial modelling.

  54. Praveen says:

    Hi Karthik,
    All your varsity work is truly commendable. Keep up the excellent work. I am sure the goodwill you are earning here from folks reading your stuff far surpasses any fat salaries or insane trading profits you ever will make.

  55. Kallol Sen says:

    Sir, if any help needed for publishing documents for next chapters, you are requested free to tell, I am interested to put my effort and will be wholehearted for helping you and versity readers. I am in learning stage and it will enrich my knowledge as well.

  56. Altamash says:

    I am a derivatives trader and investor myself. To anyone’s whos asked me on how they should get started with markets, I have suggested all of them to come to Varsity. Reading here is like a story, never gets boring. Thanks for the initiative.

  57. Divyaleela says:

    one of the best and easiest explanations I have ever seen.
    Thank you very much, sir.

  58. Shweta says:

    Your writing is lucid and to-the-point for any layperson to understand such an arcane topic.
    Congratulations on that πŸ™‚ I am thoroughly enjoying studying about Investments.
    However, I was just wondering why are the current modules not reflected in the Varsity app (Android)? I checked for updates on PlayStore but I am using the updated version of the app.
    Also, there is a slight change of language which I observed… The content is more or less the same, but a little more content is found on the Desktop site.
    Any particular reason Sir? Also, should I refer the Desktop site for future use?
    Thanking you in anticipation.
    Again, great job with the content πŸ˜€
    Best regards πŸ™‚

    • Karthik Rangappa says:

      Thanks for the kind words, Shweta. Yes, the app is lagging the desktop in terms of the availability of content. The thing is each module in the app has several illustrations. This takes time to put up. Hence the delay. Eventually, everything on the desktop will be made available on the app. We are currently working on making the personal finance module live on the app. Content quality wise, its the same πŸ™‚

  59. Shweta says:

    Thank you so much for your reply sir πŸ˜€ I will primarily use the app for now then, and just check the desktop for any updates and the discussions in comments related to that particular topic. πŸ˜€ Thanks again πŸ˜€ Have a great day ahead πŸ™‚

  60. Arvind bharati says:

    Sir,how many probable cheapter we can guess for this financial modeling ? I heared that modeling made mostly in excel rather theory,is that right ?

  61. Shrikanth Kulkarni says:

    Thanks Karthik for this wonderful platform. Zerodha is doing a tremendous job to help us learn without any additional cost. Really excited to learn this new module from you.

  62. Sourabh Arora says:

    When will upcoming chapters be published?

  63. Sarvesh says:

    Something very helpful…THANKYOU!!!

  64. Ashish says:

    Super work Karthik

  65. Kumar Rahul says:

    This is such a great chapter. I am also learning data science. I hope both of them come together and my interest in finance multiplies. Thank you for taking your time and putting your efforts for all of us. I just hope we deserve it.

  66. Chandu says:

    Worth waiting for this one!
    Thank you,Karthik Sir
    Grateful to you.

  67. Arvind bharati says:

    Dear sir in this module where to read/get catogory and sector and company wise case study ?

  68. Ganesh Patel says:

    Ohh..wow.
    Sounds likes very important moduleis getting started. I will go back and first revise fundamental analysis module.

  69. Vibhore Gupta says:

    Thanks for replying back, I did the financial modelling course from Udemy. Looking forward for insights from zerodha varsity.

  70. Naga Priyesh Reddy Chappidi says:

    i have started learning the zerodha varsity but many things i couldnt understand.is there any zerodha varsity youtube channel to see rather than reading

  71. Yash Luthra says:

    Great information on financial modeling. The synopsis of the module was awesome with easy learning language.

  72. Rahul Soni says:

    Thanx sir for this latest module
    Every module is very helpful for me
    Great work sir
    Thank you so much

  73. Nikhil Battula says:

    Hai Karthick Sir
    could we expect a module on quantitative analysis? from you (which u have mentioned is important in developing a point of view while taking decisions in the market)

    And Really thanks for giving us financial literacy

  74. Nikhil Battula says:

    Thank you Karthik Sir

  75. Ankit says:

    Will I get a notification if you respond my message?

  76. Ankit says:

    You should open a coaching center named Varsity and teach this there and thank me later, it is too much to learn here can’t decide where to read, currently I had completed “Module 1- Basics of. . .”, “Module 2- Technical. . .”, “Module 4- Futures. . .”, (from the website not the app) and am confused if to start “Module 5- Options. . .” or to start “Module 11- Personal fin. . .”. Help me please!

  77. Gaurav Jain says:

    Nice Modules. Teaches everything in simple language. Even a laymen can understands them.

  78. Shibin Jacob says:

    Dear Karthik Sir

    I can’t thank you enough for all the knowledge you are sharing via Varsity. All chapters I have read so far are simply awesome(I have to admit, Options were bit hard to understand :)). Some time back, words like finance, stock market, trading, investing etc were very hard to digest for me. But Varsity alleviated all sorts of such difficulties and now I have more insight than ever. You and your team certainly made a difference in my life. I am pretty sure with a lot of people who read Varsity. I have got nothing else to say, but keep going. KR rocks!!!

    Coming into my questions

    1. I havent created a stock portfolio of my own yet. I am not sure which stocks to select. I havent read the FA module yet as I was more interested in trading. I believe I will know where to start if I get a grip of FA. But I assume this module will be the last piece in the puzzle to build a financial model for choosing quality stocks for investment. Please correct me if I am wrong

    2. I just came across this post where you gave an answer related to investing in companies filed IPO

    https://tradingqna.com/t/if-a-new-company-went-for-ipo-as-an-investor-how-can-i-determine-that-i-am-investing-in-a-good-company-since-there-is-no-past-data-available-at-the-exchanges/324

    Does this module deal with all the things(in detail) you mentioned in your answer?

    • Karthik Rangappa says:

      Thanks for the super kind words, Jacob.

      1) Yes, this module along with FA will help.
      2) Yes, most of it will be covered here.

  79. Shibin Jacob says:

    You’re welcome sir
    Very much excited about this

  80. Jai says:

    Thanks a lot for starting this module Karthik sir. Just one question that, will there be a certification exam available for this module too?

  81. Sathanandh says:

    sir could you recommend any books/materials for comprehensive analysis of stocks and derivatives?

  82. Jateen says:

    More power to you sir. Doing great job πŸ™‚

  83. Pratik Mohadikar says:

    Sir, Its a great efforts of you, thanks for sharing your knowlege and helping us for grow.

  84. Karthick S says:

    Great work, great effort, I dono how much days you have spent to make this available here for user’s, that too for free of cost really appreciated and it’s admirable, have downloaded 11 modules yet to go through hope I would enjoy every module, one obligation last two module are not available to download as a PDF is it possible to provide the same so that all of us can read it in offline also, thank you so much for providing such a wonderful learning materials.

    • Karthik Rangappa says:

      Module 13 in Financial modelling will be put up only after its completed. Module 12 cant be converted to PDF πŸ™‚

      I’m glad you liked the content on Varsity πŸ™‚

  85. Sowmya says:

    Expecting full financial modelling as soon as possible

  86. Prashant says:

    Dear Karthik, great efforts .
    Can you guide from where I should read about working knowledge about MS excel
    ( sorry, I am poor in this part)

    • Karthik Rangappa says:

      Prashanth, I guess there are plenty of videos on Youtube, I request you to check that. Thanks.

  87. Shanakar says:

    From module 11 there is no option to download pdf
    Please provide that option it can be helpful

  88. Rahul Deva says:

    Any reasons for disabling PDF download in Module 12 and 13?

  89. Utpal Khardenavis says:

    Wonderfully written. Its easily understandable for people like me who hasnt been in touch with theoretical finance for quite some time. Thanks Karthik and team!

  90. sagar says:

    Nicely explain, is that any chances to manipulated the balance sheet and P&L statement by the company for attracting the retail investors ? if yes , then any method apprehend to this.

  91. ASHOK says:

    Really useful for a person like me and many others, who dont have much theoretical knowledge on financial analysis and financial management. Explanation in its simplest form ! Thank you so much, Sir.

  92. Prabhu says:

    So nice about zerodha that it is helping it’s customers to learn about the markets in order to avoid being cheated.
    Thank you for that and excited for learning this long waited module.

    • Karthik Rangappa says:

      Happy reading, Prabhu. Btw, this is open for all, not just for Zerodha customers πŸ™‚

  93. Prasath Balasubramanian says:

    All my academic studies given me a tough life while in earning or learning… but getting into Varsity lot of Value addition in my personal as well as professional life

    Zerodha Varsity is my real Academy or Gurukul & Karthik Rangappa is my real Teacher or Guru

    • Karthik Rangappa says:

      Thanks so much for the kind words, Prasath. I hope you will enjoy reading and learning from Varisty.

  94. Kishan P V says:

    A good module, looking forward in reading next chapters.

  95. ANish says:

    Hi K,
    Thanks a lot for these great learning resources free of cost :).
    Can I consider this module as a continuation of Fundamental Analysis… as I can see it help if we jump to this module after completing the FA.

  96. ANish says:

    Sir, Thanks for the reply πŸ™‚ Will try to connect these two modules concepts throughout.

  97. Jeyasri says:

    These are so informative. Thanks a top zerodha team.

  98. ANish says:

    Sure sir.. will let you know:)

  99. PRADIP BISWAS says:

    Please make in video format.

  100. Sanand Srivastava says:

    It would be better a Handbook containing piquancy of all modules will be a treasure for the beginners.

  101. M. Kumar says:

    Sir please provide the hindi pdf also.

  102. Anand says:

    Hello… I have been reading all your varsity and this is really awesome effort in this era to simplify such complicated subjects into understandable bits. I have a small point related to innerworth-mind over markets as comments are closed in that module. I liked first three chapters and my request is can I have a next chapter link towards end of one chapter so that I can move to next chapter without going back and forth in the browser. I dont know if its possible, but I thought I would first let you know about this issue in that module. Overall, hats off for your effort… You deserve recognition at the highest possible level Professor….

    • Karthik Rangappa says:

      Tanks, Anand. We closed the comments section because of the large number of articles in inner worth. About the next chapter link, let me check.

  103. Dinesh K says:

    Hi Mr. Karthik, certainly this is a good initiative. By the end of this, May i become an expert ?

  104. Tanish jain says:

    Does the reader should have excess to the excel sheet? is it necessary?

  105. Kapil soni says:

    Hello sir is there any book available …

  106. basil says:

    SIr can make a pdf copy this module ? . i have downloaded all other modules pdf and taken a printout but in this module i cannot see the download option

  107. Ragul S says:

    I am in CA Final planning to do Investment Banking for that Financial modelling is required so this module above is the first thing I learnt. It is Very interesting and am excited.
    Like Watching Money Heist curious to learn and grow to become the professor (Financial modelling expert) 😁😁

  108. VIJAY says:

    HAPPY TEACHERS DAY @ Karthik Sir

  109. Sunit says:

    Thanks a ton for this Module !!

    Though I am not able to view this on the Android App. I was hoping to see it in the app too since it is much more feasible for me to learn from my phone.

    Can I expect the update on the app anytime soon?

    • Karthik Rangappa says:

      The module is not complete, Sunit. It will get updated when the module is complete, which will take sometime.

  110. Sunit says:

    And I had another question regarding the slight difference in content in the app and the website since there are links given in the app for “further reading” on the website.

    Would you recommend learning from the website rather than the app to streamline the learning process?

  111. Aryan Ali Mondal says:

    Sir i am reading to this book in the late night literally this book gives a great feeling, better understanding, outstanding knowledge and all. Thank you sir to provide this types of modules it’s makes a future traders,value analyser and many more ( if everyone read this book seensearly) and lastly again thank you sir πŸ™‚

  112. MAYANK GUPTA says:

    how to select stocks from the whole stock universe to apply integrated financial modelling?. we cannot do this for each and every stock.

    • Karthik Rangappa says:

      That’s right. Building a model is the last stage of your analysis. Before this, you need to run a decent fundamental analysis on the company. I’ve explained that in the fundamental analysis module.

  113. ARUN BALAJI says:

    Thank for your work Sir.

    Sir It seems like a CMA (Credit Monitoring Arrangement report). its correct sir?

  114. Anugrah k says:

    Thank you very much sir, expecting more modules from you sir

  115. maladi says:

    Hi can you please recommend any resources (ytube or books) to learn excel for financial modelling

  116. Anurag Perala says:

    Sir, after the completion will we provided with certificate of this module?

  117. CK says:

    The language of the course is more simpler than the curriculum. Spent more than 90k to learn the markets with the wrong guy, fooling people

  118. Sai Krishna Praneeth Duggirala says:

    hope this comes with a certification as well

  119. SANDIP GUMTYA says:

    Aren’t all the modules downloadable in PDF?

  120. ishaan bhasin says:

    sir, please the pdf of module 12 and 13 too, so that i can easily download it completely

  121. Krishna says:

    Why it isn’t available in Varsity App?

  122. Maithilesh says:

    where is download button.

  123. sahib says:

    Please make the option to download the module available for this one too. That really helps to make notes by underlining and highlighting text in pdf.

  124. shiva says:

    Hi, Karthik your writings are great and easy to understand. Please continue what you’re doing. I’m (MBA) working as a power bi developer can I get into the asset management industry or investment banking career.

    • Karthik Rangappa says:

      Thanks, Shiva. I think power bi is widely used for dashboards and reporting. So I guess you do have a chance.

  125. Mihir says:

    Wow, excited to learn. Find really easy to understand, great work Sir

  126. Rohit says:

    Is there any pdf for this module?

  127. Mukul Pandya says:

    Hell Karthik,
    Your way of teaching such difficult topics in very structured and detailed manner is highly appreciable. Keep up the good work and spread this knowledge.

  128. NAVEENKUMAR K says:

    Hi Sir,

    I am reading Varsity Innerworth Module daily. In Module 12 Innerworth β€” Mind over markets β†’ Chapter 362 Seeing a Creative New Idea. The same content is repeated twice after 8th Paragraph. Thanks!

  129. Samir says:

    Hi, I have a Tickertape Pro Subscription.
    There I can find the valuations of the company and many other insights for a company.
    So, is this module useful for me still?

  130. Samir says:

    Ok Sir, that’s quite intriguing. If I do my own research my conviction will be quite strong for a particular stock.

    But at the same time, professionals at tickertape must be quite expert and they may also be doing the same amount of hard work and providing the insights. My point is why should I do the same amount of labour, if I am getting these through people who are more talented and expert than myself.
    Please note that I am quite novice to the Finance field and it will take me few months/years to really play with these financial stuffs and be an expert. Till then how should I invest?
    Please enlighten your thoughts on my concern.

    • Karthik Rangappa says:

      Samir, I agree. Its just about developing a good conviction on the stock. Comes in handy in bear markets πŸ™‚

  131. Akash says:

    The best part of Varsity is you don’t have to mug up every single concept.
    it gives you the knowledge which makes you comfortable as a beginner and you try to do it on your own.
    by dealing with it practically you are solving them and when you solve them it excites you, and those hard concepts will be remembered forever.

    SO, it’s a recommendation whenever you want to start any exhaustive course of finance give try to Varsity first, so you love your exhaustive course and enjoy it.

  132. Suraj says:

    Hello Karthik!
    In the above article you have mentioned “I don’t know if financial modelling is taught in the classic article format. I could make a huge mistake attempting this task, but I think it is worth the shot.”

    Now that you have completed writing 11 chapters, do you think it is a good way to learn financial modelling from this module?

    I am new to financial modelling and interested in learning, I hope this module is the right way to learn.

    • Karthik Rangappa says:

      Suraj, being the author of this module, it will be very difficult for me to give you an answer. I’d suggest you read through a bit and see if it works well for you.

  133. Aditya says:

    I would like to say that varsity modules are the best and easiest way to understand the capital market. I am an MBA (finance) and also have a NISM certifcate in Research Analysis, but the modules of varsity are much more easier and practical than the study material provided by NISM, the fundamental analysis covers all the essential parts of financial analysis in the simplest way possible with practical approach ofcourse.
    I would like to thanks Karthik Rangappa Sir for his efforts in making finance easy for all.

  134. Sanjay Sudhakar says:

    Hello Karthik Rangappa,
    What you and your team doing is nothing less than phenomenal. Thanks for these.

  135. Zed says:

    Sir, I would like to know what kind of difference will there be between stocks that we pick for investing using fundamental analysis and the ones that we pick using Integrated financial modelling? Which of the two methods according to you is a better gauge for predicting the company’s future performance and its change in share price?

    • Karthik Rangappa says:

      So you pick stocks that you think are fundamentally good and would have done one round of due diligence. Once you are convinced, the 2nd step is to build the model and get a deeper understanding of the company. You don’t really start with the financial model directly.

  136. Chetan Nahata says:

    Hello Kartik Sir,
    1. Does Zerodha have a fully automated Algo trading platform (came across AlgoZ on the web) or is it discontinued?
    2. Can we fully automate Streak?

  137. Chetan Nahata says:

    Thanks once again sir :),
    To be frank it sort of gives me the courage to explore markets deeper than just investing and trading knowing I could quickly get any of my doubts solved through you just by posting a comment varsity.
    thanks a lot, sir:)

  138. Chetan Nahata says:

    Hello, once again sir,
    Actually, there are two topics about Zerodha I’d like to have an update on namely :
    1. trading cross currency pairs with Zerodha
    2. Investing in the US via Zerodha after the NSE IFSC thing

    Thanks for all of your work Sir πŸ™‚

  139. Bharat says:

    Hii Karthik Sir
    Now that all the modules have been released, can we get a single PDF which can be used to highlight, comment etc.

  140. Gopi says:

    One of the best & best tool is varisity. Always rocking Mr.karthick rangappa sir.

  141. Rushabh Gala says:

    Very great of you to insert this module into varsity. People spend lakhs of Rupees in training for doing valuations. Thank you so much.

  142. Sujeet Kumar says:

    Nice content. Please add video for remaining modules also.

  143. Sonal says:

    Hi,
    Thanks for sharing financial modelling module. I really like this initiative from varsity, it’s really helpful πŸ™‚
    However, can we have this course explained on Youtube (Live or recorded session).

  144. Abhishek Kumar says:

    Insightful series for learning Financial Modelling.

  145. Brijesh Panchal says:

    How can I download complete pdf for module 13 and module 14? Please suggest. Option of download pdf does not appear at the end of these two modules.

  146. Ravindra says:

    Sir, Excellent modules. Excited to learn more.

    Can you please provide a downloadable PDF version as well? Thanks.

  147. Surendra says:

    Why module 13. Integrated Financial Modelling and 12. Inner worth β€” Mind over markets are not available on mobile app?

  148. Sourabh Banerjee says:

    Hey Karthik Sir

    Wishing you and the entire Zerdha Team an adventurous, eventful 2023.
    Regarding Introduction to Financial Modelling- is there any option to download the pdf version of this module just like other modules?

    Rgds
    SB

  149. Amit Raj says:

    I want modual no 12,13,14

  150. Sandeep says:

    Hey Karthik, this is a wonderful series, thanks for all the hardwork in compiling all these. Can you please provide the pdf version for this ?

  151. Dhananjay says:

    Why this module isn’t there in the Varsity app? I am only able to see 11 modules till Personal Finance

  152. Harshpreet says:

    will this module be enough to learn everything about this area if I want to intern in this field? It is too difficult to find internships for a fresher in this field.

  153. Harshpreet says:

    How can someone go forward after completing this?

  154. Vishruth Aggarwal says:

    Please provide the PDF for this module.
    it has been very long since there has been no update to this module

  155. tushar says:

    sir,please provide the pdf for this module.

  156. Rakshay Jain says:

    Hi sir, this financial modelling module is not available on the app. Btw thank you for all your efforts

  157. Vineet says:

    Hello, how I can access the downloadable pdf of this module, the way it is available for other modules ?
    Thanks

  158. Banibrata Dutta says:

    Thanks for the excellent material. Unlike most other modules, this one doesn’t have a consolidated PDF for one to download and read on an ebook reader, on the go. Would be very nice to have the PDF.

  159. Digvendra Singh says:

    Okay so it’s best to have the numbers and metrics directly from the annual report, but if I am screening companies based on some metrics using a screener then the data will be fetched from a random vendor only. I cannot go through the annual reports of each and every company. So if I am using a screener then how to authenticate the data ?

    • Karthik Rangappa says:

      You can use 3rd part services like Screener and Tijori for screening and reducing your workflow, but you will eventually have to look at the AR to validate your information.

  160. Chaynika says:

    Hi,
    Can we please have pdf download option for this module.Thanks

  161. Digvendra says:

    What are your thoughts about TICKERTAPE as a screener?

  162. Krish says:

    Hi, please enable download pdf option for the recent modules-13,14,15,16

  163. Ajeeth says:

    Hi Vineet Sir,

    Can I get the option to download the whole content in a single PDF like it is until Module 11. I don’t like reading from laptop or through mobile, I would take a print and study and make my notes on that. I like it old school which I’m a big fan of. Please give the option to download all the content in a single PDF for all modules after module 11. Thank you and hope to see this option soon. Please please.

  164. Raghavan says:

    Hello Karthik,
    Once again thank you and Zerodha for creating such beautiful content, similar to Varsity certification. Please provide more certification opportunities for the users and let it be continuous learning.

  165. Anirudh Jain says:

    Hello, Karthik sir, Thank you for creating all the modules, they were really really amazing. It will be very helpful if you can make video sessions on this module “Integrated Financial Modelling” to understand more easily this practical approach module.

  166. Balakrishna Reddy says:

    Sir can we expect this module in PDF Format. Please make it available in pdf format. It really helps us. Thank you

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