Fundamental analysisOthersStock investmentsTemplatesValuation Models

Quantitative Analysis And Long Term Ratio Analysis Of Stocks

Written by Ansh Thakkar (Individual Contributor)
Thu Apr 15 2021
Detailed Analysis and Comparison
See how MarketXLS helps you take advantage in the markets.
Download Option Templates →
Detailed Analysis and Comparison
 

What is Quantitative Analysis?

Quantitative Analysis of stocks is a technique that uses mathematical and statistical modeling, functions, formulas, and measurements to understand the behavior of a particular set of data or a variable. It is an approach that uses mathematical and statistical analysis to help determine the value of a financial asset, such as a stock, mutual fund, commodity, forex, or an option. This analysis is based on the historical movements and historical prices of the financial assets.
It is a process of collection, classification, and interpretation of measurable and quantifiable numerical data. With the era of improving data technology and data analysis, quantitative analysis is now considered a better approach to making risk-leveraged decisions.
This analysis help investors and traders find out investment opportunities and various techniques and trading strategies which they can use to trade in financial assets. It also helps to find out the perfect time to enter and exit the market.
Quantitative Analysis (QA) of stocks in financial markets is mainly based on ratios for investing in stocks.
In this article, we will study how to do a Quantitative Analysis of stocks using various fundamental ratios in the MarketXLS software. This blog is based on a combination of two of our templates.
The templates are:
Ratio Analysis Long Term Fundamentals
• Quantitative Analysis of Stocks
Let us study both of them in detail.

Ratio Analysis Long Term (Fundamentals)

Investors can look at various fundamental ratios and figures to gauge the strength of stocks and the potential to generate returns in the future. This template covers three areas of fundamental analysis and provides a good comparison with the industry peers entered by the user.
User needs to enter the company ticker and competitors in the same sector/industry to analyze and compare the companies on the following parameters:
1. Return Ratios
2. Valuation Ratios
3. Cash Flow Ratios
4. Fundamental/ Financial Indicators

‘Index’ Sheet

Index Sheet
https://marketxls.com/template/ratio-analysis-long-term-fundamental-based/

Enter Stock Ticker in cell ‘E6’ and the year of analysis in the cell ‘E8’ of this sheet to get the result summary. This result summary gives you information on crucial return ratios, key financial indicators, key valuation ratios, and critical cash flow ratios of the company. In this example, we have taken ‘Google’ as our targeted stock.
For detailed analysis and comparison, you can switch to the Active Template worksheet.

‘Active Template’ Sheet

Active Template sheet

For getting a detailed analysis, you have to enter the stock ticker in cell ‘F4’ and the year of study in cell ‘F8’.
You will get an overview of the stock and four tables and graphs showing analysis and comparison of the stocks’ various ratios with the different ratios of other stocks, which are its industry peers.

Detailed Analysis and Comparison

 

Quantitative Analysis of Stocks

Quantitative Ratio Analysis is used to measure a group of stocks through a bunch of vital fundamental ratios. These ratios are some important ratios covering all perspectives of stock from valuations, margin, and earnings.
A quantitative analysis is required to gain a complete picture of the company’s performance. It is also essential to compare the stock with other stocks in the same industry to gain more insight and compare on a true scale.
Hence, the most important rationale for using this is to facilitate comparison between various stocks and gain more insight.

‘Index’ Sheet

Quantitative Analysis of Stocks
https://marketxls.com/template/quantitaive-analysis-of-stocks-2/

Enter Year in cell E7 and Stock Ticker in cell E9, E11, E13 E15 & E17 of this sheet to get the result summary.
The template will return the result of the stock’s comparison and analysis in the cell ‘E19’. The result is calculated based on a detailed comparison made in the ‘Calculations’ worksheet.
In this example, we have taken the base year as 2019. The five stocks under analysis are Facebook, Apple, Amazon, Netflix, and Google.
According to the analysis made by the software, the best stock to pick would be Apple. (NYSE: AAPL)
(These templates do not account for any professional advice but are merely some guidelines to explain the concept. It would be best if you did NOT make your investment decisions solely based on these templates. Past performance is not a guide for future performance.)
For detailed analysis, comparisons and calculations, you can shift to the ‘Calculations’ sheet.

‘Calculations’ Sheet

Calculations sheet for detailed analysis

This sheet contains a detailed analysis of all five stocks.
The first table covers the following information about the stocks:
• Sector
• Industry
• Market Capitalization
The second table contains information on various ratios and stocks, which helps in gaining an insight into the fundamentals of the respective companies.
The third table provides an overview of the analysis by giving each ratio of a stock a score on a scale of five. The scores of all the ratios of each stock are totaled, and the final result is calculated. The stock with the maximum score is displayed as the ‘Best Stock To Pick’ in the cell ‘C33’.

The Bottom Line

You can build your own strategy, which involves the use of both of these templates. Both the templates provide a deep insight into the fundamentals of the company and facilitate peer comparison. Both the templates are helpful in their own way.
The templates provided by the software help investors and traders in Quantitative Analysis of stocks and help in comparison of multiple stocks using some key fundamental ratios.
Both the templates would prove to be very useful if used wisely and strategically.

Disclaimer

None of the content published on marketxls.com constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.
The author is not offering any professional advice of any kind. The reader should consult a professional financial advisor to determine their suitability for any strategies discussed herein.
The article is written to help users collect the required information from various sources deemed to be an authority in their content. The trademarks, if any, are the property of their owners, and no representations are made. All trademarks referenced are the property of their respective owners. Other trademarks and trade names may be used in this document to refer to either the entity claiming the marks and names or their products. MarketXLS disclaims any proprietary interest in trademarks and trade names other than its own or affiliation with the trademark owner.

Reference

https://www.investopedia.com/articles/investing/041114/simple-overview-quantitative-analysis.asp#:~:text=Quantitative%20trading%20analysts%20(quants)%20identify,up%20automated%20trades%20of%20securities.

 

 

Interested in building, analyzing and managing Portfolios in Excel?
Download our Free Portfolio Template
Download Option Templates

Top 100 Gainers Today

Top 100 losers Today

Real gdpReal personal consumption expReal private investmentReal govt expenditureReal net exportsReal exportsReal importsFederal receiptsFederal outlaysFederal surplus or deficitFederal debtReal private investment nonresidentialReal private investment residentialReal potential gdpReal personal incomeReal personal consumption exp monthlyRpce durable goodsRpce nondurable goodsRpce servicesPersonal savings rateMonetary baseCurrency in circulationBank reservesMoney supply m1Money supply m2Sp500DjiaWilshire indexVixFinancial stress indexCorporate bond index aaCorporate bond index bbbFederal funds rateTreasury rate 3mTreasury rate 1yTreasury rate 5yTreasury rate 10yTips 5yTips 10yBond yield aaaBond yield baaMortgage rate 15yMortgage rate 30yUs dollar weighted averageUsdollar to euroUsdollar to poundYuan to usdollarCanadiandollar to usdollarYen to usdollarCpiCpi wo food energyCpi foodCpi energyChain price indexChain price index wo food energyGdp price deflatorPpi final demandPpi finished goodsPpi materialPpi crude goodsPpi final demand wo food energyPpi finished goods wo food energyHouse price indexHouse price index 20cityCrude oil priceGasoline priceNatural gas priceIndustrial productionCapacity utilisationInventoriesSales retail foodVehicle sales light weightManufacture orders durablesManufacture orders capital goodsLoansConsumer credit outstandingCorporate profitsHousing startsBuilding permitsResidential constructionEmployees nonfarmEmployees privateEmployees goods producingEmployees service providingEmployees governmentUnemployment rateInitial cliamsAverage weeks unemployedJob openingsHiresSeparationsQuitsLayoffs dischargesHours of productionHourly earningsReal outputPopulationLabor forceLabor force participation rate
Search for a stock

Top MarketXLS Rank stocks

Booz Allen Hamilton Holding Corporation logo

Booz Allen Hamilton Holding Corporation

92.84
 
USD
 
2.48
 
(2.74%)
84
Rank
Optionable: Yes
Market Cap: 11,592 M
Industry: Business Services
52 week range    
69.32   
   93.45
Rush Enterprises Inc. Class B Common Stock logo

Rush Enterprises Inc. Class B Common Stock

51.55
 
USD
 
1.94
 
(3.91%)
81
Rank
Optionable: No
Market Cap: 2,753 M
Industry: Auto & Truck Dealerships
52 week range    
35.64   
   57.55
BWX Technologies Inc. logo

BWX Technologies Inc.

56.44
 
USD
 
1.35
 
(2.45%)
80
Rank
Optionable: Yes
Market Cap: 4,846 M
Industry: Aerospace & Defense
52 week range    
42.22   
   61.75
Ritchie Bros. Auctioneers Incorporated logo

Ritchie Bros. Auctioneers Incorporated

67.49
 
USD
 
2.43
 
(3.74%)
77
Rank
Optionable: Yes
Market Cap: 6,928 M
Industry: Business Services
52 week range    
48.44   
   75.28
Ituran Location and Control Ltd. logo

Ituran Location and Control Ltd.

24.33
 
USD
 
-0.16
 
(-0.65%)
77
Rank
Optionable: Yes
Market Cap: 504 M
Industry: Communication Equipment
52 week range    
19.49   
   29.33
General Mills Inc. logo

General Mills Inc.

75.79
 
USD
 
0.34
 
(0.45%)
76
Rank
Optionable: Yes
Market Cap: 42,311 M
Industry: Packaged Foods
52 week range    
55.38   
   75.96
CRA InternationalInc. logo

CRA InternationalInc.

89.15
 
USD
 
-0.17
 
(-0.19%)
76
Rank
Optionable: Yes
Market Cap: 646 M
Industry: Business Services
52 week range    
78.05   
   115.47
ConAgra Brands Inc. logo

ConAgra Brands Inc.

34.56
 
USD
 
0.32
 
(0.93%)
76
Rank
Optionable: Yes
Market Cap: 16,287 M
Industry: Packaged Foods
52 week range    
29.80   
   36.67
Agree Realty Corporation logo

Agree Realty Corporation

73.53
 
USD
 
1.40
 
(1.94%)
76
Rank
Optionable: Yes
Market Cap: 5,522 M
Industry: REIT - Retail
52 week range    
60.78   
   74.67
International Money Express Inc. logo

International Money Express Inc.

21.77
 
USD
 
1.30
 
(6.35%)
75
Rank
Optionable: Yes
Market Cap: 781 M
Industry: Business Services
52 week range    
14.66   
   22.86

More Features

Stand with Ukraine

As the situation in Ukraine escalates, many of us in MarketXLS are left with emotions too overwhelming to name. If you’d like to show your support, but aren’t sure how to, we want to help make it easier for you to act.

For any amount donated, we’ll extend your MarketXLS subscription for double of the donated amount. Please send proof of your payment to support@marketxls.com to avail the extention

From all of us at MarketXLS, thank you!