Fundamental Analysis & Valuation — 8 Terms Defined

Debt Service Coverage Ratio Fundamental Analysis & Valuation ratio (x, times) Cash available for debt service divided by the total of interest and principal due in the period. DSCR = Cash Available for Debt Service / (Interest + Principal Repayment Due)

Debt-to-Equity Ratio Fundamental Analysis & Valuation ratio (x, times) Total borrowings divided by shareholders' equity, measuring how much of the business is funded by lenders relative to owners. Debt-to-Equity = Total Debt / Shareholders' Equity

Debtor Turnover Ratio Fundamental Analysis & Valuation ratio (x, times) Revenue divided by average trade receivables, showing how many times a year credit sales are collected. Debtor Turnover = Revenue / Average Trade Receivables; Debtor Days = 365 / Debtor Turnover

Diluted Earnings per Share Fundamental Analysis & Valuation ₹ Earnings per share recalculated as if every instrument convertible into equity had already been converted. Diluted EPS = Adjusted Profit / (Weighted Average Shares + Shares from Conversion of Dilutive Instruments)

Dilution Fundamental Analysis & Valuation % The reduction in existing shareholders' proportional ownership and per-share claims caused by issuing new shares. New Ownership % = Old Shares Held / (Old Shares Outstanding + New Shares Issued) x 100

Discounted Cash Flow Fundamental Analysis & Valuation ₹ crore A valuation method that estimates a business's worth as the present value of the cash it is expected to generate. Value = Sum of (Cash Flow in Year t / (1 + Discount Rate) raised to t) + Present Value of Terminal Value

Dividend Discount Model Fundamental Analysis & Valuation ₹ A valuation method that values a share as the present value of all the dividends it is expected to pay. Value = Sum of (Expected Dividend in Year t / (1 + Required Return) raised to t)

DuPont Analysis Fundamental Analysis & Valuation % A decomposition of return on equity into profit margin, asset turnover and financial leverage, showing what drives the return. ROE = Net Profit Margin x Asset Turnover x Equity Multiplier = (Profit/Sales) x (Sales/Assets) x (Assets/Equity)