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Fundamental Analysis & Valuation

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Fundamental Analysis & Valuation

Impairment

A write-down of an asset's carrying value when its recoverable amount falls below what the balance sheet records.

Impairment Loss = Carrying Amount - Recoverable Amount, where Recoverable Amount is the higher of fair value less costs to sell and value in use ₹ crore Fundamental Analysis & Valuation

Interest Coverage Ratio

Operating profit divided by interest expense, measuring how many times over the company's earnings can pay its interest bill.

Interest Coverage = Operating Profit (EBIT) / Interest Expense ratio (x, times) Fundamental Analysis & Valuation

Intrinsic Value

The value of a business justified by the cash it can be expected to produce over its life, discounted to today.

Intrinsic Value = Sum of Future Free Cash Flows discounted at the required rate of return ₹ Fundamental Analysis & Valuation

Inventory Turnover Ratio

Cost of goods sold divided by average inventory, showing how many times stock is sold and replaced in a year.

Inventory Turnover = Cost of Goods Sold / Average Inventory; Inventory Days = 365 / Inventory Turnover ratio (x, times)