The Analyst's Lab

Why This Tab Is Different

Every financial website shows you ratios. Screener.in has them. Moneycontrol has them. So why does the Chart Builder bother computing its own?

Because pre-calculated ratios are trusting someone else's math. The Calculated Ratios tab goes back to the source — the raw Profit & Loss statement and Balance Sheet extracted directly from the Screener.in page you are reading — and derives these 11 ratios itself, in your browser, in real time.

This also means the tab works for any company on Screener.in, not just the 71 companies covered by Finmagine's paid research reports. Open a company page, click the extension, select Calculated Ratios, and the analysis runs instantly on whatever data Screener.in is showing.

How to Open the Tab — 3 Steps

1. Go to any company page on Screener.in (e.g., screener.in/company/POLYCAB/consolidated/) or stockanalysis.com for US stocks
2. Click the Finmagine icon in your browser toolbar — the overlay panel appears on the right
3. Select the "Calculated Ratios" tab — it is the third tab, after Charts and Quick Analysis

Polycab India — Calculated Ratios tab showing Solvency & Liquidity and Profitability sections. Note the tab bar (Charts | Quick Analysis | Calculated Ratios | Price Analysis | Valuation) and the rating legend (Excellent / Good / Average / Poor) in the top-right corner.

The Rating System — What the Colours Mean

Every ratio (except EBITDA absolute value) displays a colour-coded badge. Before diving into individual ratios, understand what these badges represent — and their single most important limitation.

These thresholds are generic, cross-sector defaults. They work well for manufacturing, consumer, and technology companies. They break completely for banks, NBFCs, and insurance companies — which will always show red on D/E, D/A, and Equity Multiplier because leverage is their raw material, not a risk indicator. We cover the Banking Exception in full at the end of this guide.

Polycab India — Solvency & Liquidity section. The four rating colours are visible: green (Excellent), lime (Good), yellow (Average), red (Poor). Polycab earns Excellent on 4 of 5 solvency ratios — a fortress balance sheet.

The 5 Categories at a Glance

The 11 ratios are organised into 5 analytical pillars. Each pillar answers a different question about the company — and together they build a complete financial X-ray.

The five analytical pillars of the Calculated Ratios tab. Parts 1–4 below cover each pillar in depth. Part 5 shows how DuPont Synthesis ties them all together.

Solvency & Liquidity — Can It Survive?

These five ratios answer one question before any others: is this company financially stable enough to be worth analysing at all? A company with spectacular growth but a failing balance sheet is an accident waiting to happen. Check survival before you check performance.

Excellent
≥ 5.0x

Good
3.0 – 5.0x

Average
2.0 – 3.0x

Poor
< 2.0x

What It Measures

For every rupee of interest the company owes its lenders, how many rupees of operating profit does it generate? A ratio of 5.0x means the company earns five times what it needs to pay interest — comfortable headroom. A ratio of 0.78x means it cannot pay interest from operations at all.

What Each Rating Means in Practice

Rating	Value	What It Means	What to Do
Excellent	≥ 5.0x	Rock-solid. Even a 60–70% drop in operating profit would still cover interest payments.	No concern here. Move on to other ratios.
Good	3.0–5.0x	Comfortable. Moderate downturns absorbed easily.	Healthy. Worth tracking trend across years.
Average	2.0–3.0x	Tight but manageable. A bad quarter or an interest rate rise could put pressure on this.	Check trend: is it improving or declining?
Poor	< 2.0x	Danger zone. Below 1.0x = operating profit cannot cover interest at all — the company is burning reserves or borrowing to pay its debt service.	Investigate immediately. Is there a one-time event, or is this structural?

Real Company Examples

Affle India (Digital Advertising)

83x

Essentially debt-free. The interest expense is so small relative to operating profit that even a catastrophic revenue drop would not threaten lenders.

Godrej Industries (Conglomerate)

0.78x

Cannot pay interest from operations. Every rupee of interest costs more than a rupee of operating profit. This is financial distress territory.

The Trend Matters as Much as the Number: An Interest Coverage that has moved from 8x to 5x to 3x over three years is more concerning than a company that has held steady at 3x. Open the Charts tab and plot Operating Profit and Interest Expense across years to see the trajectory.

Banking Exception: Banks do not pay "interest expense" in the same way — their interest payments are a core cost of their deposit-taking business model. Do not apply this ratio to banks or NBFCs. It will produce misleading results.

Excellent
≤ 20%

Good
20% – 40%

Average
40% – 60%

Poor
> 60%

What It Measures

What fraction of the total asset base is funded by creditors? D/E can look alarming when equity is thin even if debt is small. D/A is steadier — it anchors debt to total assets, giving you a cleaner picture of capital structure regardless of equity size.

D/E vs D/A — When to Use Which

	D/E Ratio	D/A Ratio
Best for	Comparing leverage across companies of similar profitability	Assessing overall capital structure and creditor exposure
Weakness	Can spike dramatically when equity is eroded by losses (not from new debt)	Does not show how leveraged shareholders are relative to their own investment
Use case	Checking if a company is taking on dangerous levels of debt vs. its equity base	Checking what percentage of the total asset pie creditors claim

Use both together. They tell the same story from different angles. A company with D/E of 3.0x and D/A of 15% is in a very different position from one with D/E of 3.0x and D/A of 70%.

The Lender's Lens: Creditors think in D/A terms. If a company defaults, lenders liquidate assets to recover their loans. D/A tells them how much of a buffer exists. D/A of 20% means creditors own 20% of assets and shareholders own 80% — substantial cushion. D/A of 80% means creditors would need to recover almost everything just to break even.

Excellent
≥ 2.0x

Good
1.5 – 2.0x

Average
1.0 – 1.5x

Poor
< 1.0x

What It Measures

Short-term survival: for every rupee the company owes in the next 12 months (suppliers, short-term loans, wages), how many rupees of assets can it convert to cash in the same timeframe? Current assets include cash, receivables, and inventory. Current liabilities include payables, short-term borrowings, and the current portion of long-term debt.

What Each Rating Means in Practice

Rating	Value	Interpretation
Excellent	≥ 2.0x	Strong liquidity buffer. Can meet all short-term obligations twice over, even with unexpected delays in receiving payments.
Good	1.5–2.0x	Comfortable. Manageable with modest room for error.
Average	1.0–1.5x	Thin buffer. Operational hiccups — a large customer paying late, a surprise expense — could create short-term cash pressure.
Poor	< 1.0x	Short-term liabilities exceed short-term assets. The company would struggle to meet obligations coming due without borrowing more or selling long-term assets. Vedanta at 0.70x is an example.

The Supermarket Exception: Some retailers and fast-moving businesses can comfortably run with Current Ratios below 1.0x because they collect cash from customers before they pay suppliers. D-Mart runs a famously low Current Ratio not because it is in distress, but because its business model involves a natural float. Always ask: does the low ratio reflect a cash flow timing advantage, or genuine stress?

Excellent
≥ 1.5x

Good
1.0 – 1.5x

Average
0.8 – 1.0x

Poor
< 0.8x

What It Measures

The Quick Ratio asks a harder question than the Current Ratio: if sales stopped tomorrow and you could not sell a single unit of inventory, could you still meet all short-term obligations? It strips inventory from current assets because inventory takes time to convert to cash and may not be saleable at book value in a crisis.

Reading the Gap Between Current and Quick

The spread between Current Ratio and Quick Ratio reveals how much of the current asset base is tied up in inventory:

Current Ratio	Quick Ratio	What the Gap Says
2.0x	1.9x	Almost no inventory — asset-light, services, or software business. Liquidity is genuine.
2.0x	0.8x	Large inventory buffer. Liquidity looks good on paper but depends heavily on being able to sell stock. Check inventory ageing.
1.2x	0.5x	Dangerously inventory-heavy for its short-term obligations. A demand slowdown could trigger a cash crisis.

The Professional Use: Forensic analysts use the Current Ratio–Quick Ratio gap to spot inventory stuffing — companies inflating inventory to manufacture an artificially healthy Current Ratio while the Quick Ratio quietly reveals the stress underneath.

Reading the Solvency 5 Together

No single solvency ratio gives you the full picture. Look at them as a system:

Profitability — Where Does the Money Go?

Survival established, we now ask: is this a genuinely profitable business, or does it generate revenue without retaining meaningful earnings? The three profitability metrics tell the story of money as it flows down the income statement.

No rating badge. EBITDA is displayed as an absolute number (in Crores for India) tagged "Info" — it tells you the scale of operating cash generation before financing costs and non-cash charges. It is not rated because an absolute value cannot be compared across companies of different sizes.

Why EBITDA Exists as a Metric

EBITDA strips out interest (financing decisions), taxes (jurisdiction effects), and depreciation (accounting policy choices) to show you the raw cash-generating power of the core business. Analysts use it to compare operating profitability across companies with different debt levels and depreciation policies.

The Critical Warning

EBITDA Is Not Cash. This is the single most important thing to understand about EBITDA. A highly capital-intensive business (power plants, airlines, telecommunications) will show strong EBITDA while retaining very little after depreciation (assets wearing out), interest (on the debt that funded those assets), and taxes. Adani Green's EBITDA margin exceeds 100% while its Net Profit Margin is just 14.8%. That 85%+ gap goes to depreciation and interest. Use EBITDA to compare operating efficiency; use Net Profit Margin to see what shareholders actually keep.

Adani Green Energy — EBITDA Margin of 107.4% (Excellent) collapses to Net Profit Margin of 14.8% (Good) after depreciation and interest charges. The 93-percentage-point gap is the cost of leveraged infrastructure. Note also D/E 4.52x and D/A 70% — both rated Poor — in the solvency section above.

Excellent
≥ 40%

Good
25% – 40%

Average
15% – 25%

Poor
< 15%

What It Measures

Of every rupee of revenue, how many paise reach operating profit before depreciation and financing costs? EBITDA Margin is the cleanest measure of operating efficiency — it shows pricing power and cost discipline without contamination from capital structure decisions.

Sector Benchmarks That Matter

Sector	Typical EBITDA Margin Range	Why It Varies
Software / IT Services	25–40%	Low capital intensity, high value-added per employee
Pharmaceuticals	20–35%	R&D amortisation excluded; manufacturing scale matters
Consumer FMCG	15–25%	Brand premiums; moderate distribution costs
Cables / Industrials	10–18%	Material cost-heavy; limited pricing power
Retail / E-Commerce	3–12%	Volume-driven, thin per-unit margins
Airlines	10–20%	Aircraft costs excluded; fuel cost volatility
Infrastructure / Utilities	50–80%+	Revenue is clean; depreciation and interest are enormous (excluded from EBITDA)

Watch the Trend, Not the Snapshot: A company with 25% EBITDA margin declining to 20% to 15% over three years is more concerning than one with a steady 15%. Use the Charts tab to plot Operating Profit Margin across years to see the full trajectory.

Excellent
≥ 20%

Good
10% – 20%

Average
5% – 10%

Poor
< 5%

What It Measures

After paying interest to lenders, taxes to the government, and depreciation charges, what percentage of revenue do shareholders actually get to keep? This is the final, honest number — what remains after everyone else has been paid.

The Profitability Waterfall

Watch the journey from EBITDA Margin to Net Profit Margin — the gap tells you where money is leaking:

Revenue → 100%

EBITDA Margin

↓

Depreciation: asset wear & tear
Interest: cost of debt
Taxes: government's share

Net Profit Margin → What shareholders keep

Real Company Examples

Nykaa (Beauty Retail)

1.5%

Rated "Poor" — but context matters. Nykaa is a retailer making money on volume, not margin. Their 1.5% margin on Rs.1,000 crore of revenue is Rs.15 crore of profit. The question is whether they can sustain and grow volume at scale.

Polycab India (Cables)

9.8%

Good — especially impressive for a materials manufacturer where raw material costs can be 60–70% of revenue. Polycab earns nearly Rs.10 for every Rs.100 of cables sold, with minimal debt cost eating into it.

IndiGo Airlines

3.8%

Poor rating — consistent with airlines globally. This thin margin is why IndiGo's 38% ROE is almost entirely manufactured by 15x leverage, not operational excellence.

The Context Principle: A "Poor" Net Profit Margin is not automatically a sell signal. A retailer with 2% NPM and 4x asset turnover generating 25% ROE is a very different business from a manufacturer with 2% NPM, 0.5x asset turnover, and 30% D/E — the first is an efficient business model, the second is a struggling one. NPM only makes sense alongside the efficiency ratios.

Efficiency — How Hard Do the Assets Work?

Efficiency ratios answer: given the assets deployed, how much revenue is being squeezed out of them? Two companies with the same profit margin can have radically different return profiles based purely on how efficiently they use their assets.

Excellent
≥ 10.0x

Good
5.0 – 10.0x

Average
2.5 – 5.0x

Poor
< 2.5x

What It Measures

While Total Asset Turnover includes everything on the balance sheet — cash, receivables, inventory, investments — Fixed Asset Turnover narrows the lens to just the productive physical base: land, buildings, plant, and machinery. It asks specifically: how hard are the factories and equipment working?

When Fixed Asset Turnover is Most Valuable

This ratio is most informative for manufacturers, industrials, and asset-heavy businesses. It answers questions like:

• Is a new factory (capex spent two years ago) now generating revenue efficiently?
• Are older assets being sweated harder as they depreciate, or is revenue growth not keeping up with the asset base?
• Is a company sitting on large idle fixed assets relative to its revenue (capacity underutilisation)?

Polycab (Cables Manufacturer)

High Fixed AT

Every factory and machine generates strong revenue relative to its book value. Capex has translated efficiently into throughput.

Adani Green (Solar Infrastructure)

Low Fixed AT

Expected and normal. A solar farm is designed to generate the same electricity for 25 years. You cannot "sweat" it faster. The asset naturally has a low revenue-to-cost ratio — the return comes from longevity, not throughput.

Track the Trend After a Capex Cycle: A company that spent heavily on factory expansion two years ago should show rising Fixed Asset Turnover as the new capacity ramps up. Flat or declining Fixed AT after a major capex cycle is a warning — the new assets are not generating expected revenue.

Leverage — The Amplifier

DuPont Analysis — The DNA Test for ROE

This is the crown jewel of the Calculated Ratios tab — and the reason a single number like Return on Equity can be deeply deceptive without decomposition.

The Formula

The Four Company Profiles

When you look at a company's DuPont breakdown, you are placing it into one of four fundamental profiles. Each profile has a completely different risk/quality character:

Reading the DuPont Section in the Tab

The DuPont section appears at the bottom of the Calculated Ratios tab. It shows:

1. The three components and their individual values with colour ratings
2. The calculated ROE (NPM × AT × EM)
3. A comparison against Screener.in's reported ROE — if the difference is under 2%, it shows "Matches (Verified)". Larger differences are flagged as "Slight difference" and usually reflect timing or averaging choices

Polycab India — DuPont decomposition: 9.8% × 1.57x × 1.62x = 25.1% ROE. All three drivers are modest and balanced — this is earned ROE, not leveraged ROE. The equity multiplier of 1.62x confirms the company is barely using debt to amplify returns.

Polycab — Quality Compounder

Low leverage (1.62x EM) · ROE earned through operations

IndiGo — Leveraged Growth

15.07x equity multiplier · 38% ROE manufactured by debt

How to Use DuPont in Practice: Two-Step Analysis

Step 1: See a company with ROE above 20%. Do not celebrate. Open the DuPont section.

Step 2: Ask the diagnostic question:

• Earned ROE: High margin + reasonable turnover + low equity multiplier (≤2x). This ROE is resilient — it will compress in bad times but the company will not collapse.
• Bought ROE: Low margin + low turnover + high equity multiplier (>4x). This ROE is fragile — any margin compression gets amplified by the leverage, and a bad year can destroy shareholder value rapidly.

DuPont for Banks — Handle With Care

The Banking Exception — When All the Rules Break

Run Bajaj Finserv through the Calculated Ratios tab and you will see red everywhere: D/E of 5.13x (Poor), Asset Turnover of 0.21x (Poor), Equity Multiplier of 9.25x (Poor). Should you panic?

No. You are looking at a perfectly healthy financial services conglomerate through the wrong lens.

Wrong lens vs right lens — Calculated Ratios shows red everywhere for Bajaj Finserv; Quick Analysis gives an accurate Health Score of 76 (Good) using banking-appropriate metrics.

Why Banks Operate By Different Rules

Think about what a bank does. Its raw material is other people's money. When you deposit Rs.1 lakh in your savings account, that appears on the bank's balance sheet as a liability — the bank owes it back to you. The bank then lends that money to borrowers, which becomes its assets.

Calculated Ratios: red across solvency and leverage — structurally expected for an NBFC

Quick Analysis: same company scores Health Score 76 (Good) using the right NBFC lens

Same company, two tabs — Calculated Ratios shows structural red flags; Quick Analysis uses sector-appropriate metrics for an accurate read

The 6-Step Analysis Workflow

Now that every ratio is explained, here is how to sequence them for maximum insight. Do not treat the Calculated Ratios tab as a random dashboard — there is a logical order that builds a complete picture.

The 6-step workflow as a decision wheel — each segment represents one analytical gate. Work clockwise: survival first, returns last.

Complete Threshold Reference

All 11 ratios with exact thresholds — extracted directly from the extension source code.

Polycab India — the complete Calculated Ratios tab. Upper half: Solvency + Profitability. Lower half: Efficiency + Leverage + DuPont. Nearly every section green or lime — a textbook Quality Compounder profile.

Your Assignment — 5 Companies, 5 Profiles

Open each of these companies on Screener.in with the extension open and work through the 6-Step Workflow above. Each one demonstrates a different aspect of the framework.