Fundamental analysts and Technical analysts love to go at each other. The fundamental guys turn their eyes away from the magical lines made by techies, while techies say that fundamentalists are obsessed with annual reports and pictures of Warren Buffett. Neither of them believes in other's methods of analyzing the market, whereas, in reality, both are complimentary. Together, if you combine them, they will be even greater. The whole is greater than the sum of parts. Combining them you increase the probability of having a winner. And with the use of the Financials on Charts script, you can now do that!
What it shows on a chart?
With this indicator, you can see the following on a chart:
An Info Panel, with the financial snapshot of the company, such as its market capitalization, annual & quarterly financials, Y/Y growth numbers, profitability margins, RoE & RoCE, and valuation ratios.
EBITDA and PAT margins over a period of time.
RoE and RoCE ratios over a period of time.
Valuation multiples over a period of time.
A comparison of margins, return ratios, and valuation multiples with any peer-group company.
Why the need for this Indicator?
Consider this - your charts are screaming to you to buy a stock on a perfect breakout setup, whereas fundamentally, it is junk with no growth, no profit, no RoE, high debt, etc. Why in the world will you ever put your money into it (unless you're buying it for a couple of hours)? There has to be a fundamental reason backing it up. Here comes the fundamental analysis, but you don't need to go to a fundamental website to check basic data. With this indicator, you can do that right on the chart itself. Similarly, you have found an excellent fundamentally-sound undervalued company and you jump into it. But then the stock goes nowhere for months & months & years! That's dead money! Won't it make sense to put money when it actually starts rising? To avoid that dead money, you use technical analysis to time the entry. That is the sole reason for overlaying fundamental analysis with technical analysis.
The following are some of the screenshots of Bata India Limited, taken on 23rd April 2020. The same can be seen for any company under its chart. For comparison, I have considered Relaxo Footwears as a peer company.
This gives a quick snapshot of the financials of the company whose chart is opened. This includes annual & quarterly Revenue, EBITDA, PAT, margins with Y/Y changes, Debt-Equity ratio, ROE, ROCE, and valuation multiples.
Profitability & Return Ratios
You can view quarterly as well as annual ratios such as RoE, RoCE, EBITDA & PAT margins. You can choose to see these ratios either only for the company or can also add a peer company to compare. In this example, you can see the comparison between Bata and Relaxo. Also, the price of Relaxo, indexed to 100, is shown in the upper panel to show the possibilities of study.
You can view TTM valuation ratios such as EV/Sales, EV/EBITDA, P/BV & P/E multiples. You can choose to see these valuation multiples either only for the company or can also add a peer company to compare. In this example, you can see the comparison between Bata and Relaxo. In this example, the price of Relaxo is intentionally not added in the upper panel.