📊 Company Financial Health Analysis - DCF & Ratio Analysis

Author: Mousumi Paul
Project Type: Personal Finance Project
Date: December 2025

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🔍 Project Overview

This project performs a comprehensive financial health analysis of a publicly listed FMCG company using 5 years of historical financial data (FY2019–FY2023). It includes:

• Full Financial Statement Analysis (Income Statement, Balance Sheet, Cash Flow)
• Discounted Cash Flow (DCF) Model to estimate intrinsic value
• 15+ Financial Ratios across liquidity, profitability, leverage, and efficiency
• A structured management-style report with findings and recommendations

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📁 Project Structure

financial-health-analysis/
│
├── data/
│   ├── raw/                        # Original financial data (Excel/CSV)
│   │   └── financial_statements.xlsx
│   └── processed/                  # Cleaned data ready for analysis
│       └── cleaned_financials.csv
│
├── notebooks/
│   ├── 01_data_cleaning.ipynb      # Data loading & preprocessing
│   ├── 02_ratio_analysis.ipynb     # 15+ financial ratio calculations
│   ├── 03_dcf_model.ipynb          # DCF valuation model
│   └── 04_visualization.ipynb      # Charts & dashboards
│
├── src/
│   ├── ratio_calculator.py         # Functions for all financial ratios
│   ├── dcf_model.py                # DCF & WACC computation logic
│   └── utils.py                    # Helper functions
│
├── reports/
│   └── Financial_Health_Report.pdf # Final management-style report
│
├── outputs/
│   ├── charts/                     # Saved visualizations
│   └── tables/                     # Ratio summary tables (CSV/Excel)
│
├── requirements.txt
├── .gitignore
└── README.md

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🧮 Key Components

1. Financial Statement Analysis

• Income Statement: Revenue trends, EBITDA margin, net profit analysis
• Balance Sheet: Asset composition, working capital, equity structure
• Cash Flow Statement: Operating/investing/financing cash flows

2. DCF Valuation Model

Parameter	Assumption
Forecast Period	5 Years
WACC	Computed from Cost of Equity (CAPM) + Cost of Debt
Terminal Growth Rate	3–4% (sensitivity tested)
Sensitivity Analysis	WACC × Terminal Growth Rate grid

3. Financial Ratios (15+)

Category	Ratios
Liquidity	Current Ratio, Quick Ratio, Cash Ratio
Profitability	Gross Margin, EBITDA Margin, Net Margin, ROE, ROA, ROCE
Leverage	Debt-to-Equity, Interest Coverage, Debt-to-Assets
Efficiency	Asset Turnover, Inventory Turnover, Receivables Turnover, Days Sales Outstanding

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⚙️ Setup & Usage

Prerequisites

pip install -r requirements.txt

Run Analysis

# Step 1: Clean data
jupyter notebook notebooks/01_data_cleaning.ipynb

# Step 2: Ratio Analysis
jupyter notebook notebooks/02_ratio_analysis.ipynb

# Step 3: DCF Model
jupyter notebook notebooks/03_dcf_model.ipynb

# Step 4: Visualizations
jupyter notebook notebooks/04_visualization.ipynb

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📦 Dependencies

See requirements.txt for full list. Core libraries:

• pandas, numpy – Data manipulation
• matplotlib, seaborn – Visualization
• openpyxl – Excel file handling
• jupyter – Notebook environment

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📌 Key Findings (Summary)

(Update this section with your actual company findings)

• The company demonstrated consistent revenue growth of ~X% CAGR over 5 years.
• DCF intrinsic value estimated at ₹XXX/share vs. market price of ₹XXX — suggesting X% upside/downside.
• Liquidity position remained healthy with current ratio above 1.5x throughout.
• Leverage was moderate with D/E ratio declining from X to Y, indicating improving financial stability.

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📄 Report

The full management-style report is available in reports/Financial_Health_Report.pdf.

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