Nolan's Financials Framework Sheet
- Nolan Kushnir
- Apr 23
- 6 min read
Hello, welcome back for blog post number eight! Today's post is a little bit of a mix between the categories of personal investment and company analysis. Similar to the 20/40/40 budgeting strategy, which my first ever post was focused on, I want to once again provide you all with a valuable framework to use in your financial endeavors, which is user friendly from novice to intermediate level skills (chances are, if you're an expert this type of information is already second nature to you). Essentially, I developed an excel/google sheets compatible financial evaluation cheat sheet, and this post is going to focus on explaining what it is, how it works, why it works, and how YOU can use it for yourself to maximize your investment potential, for completely free! All I ask in return is that you share this blog, and sheet, with someone you know who might be getting into investing their money, and like I mentioned before, this sheet is very user friendly and easy to quickly get the hang of, so that you can start picking out the high value stocks today!
First of all, I am going to provide you guys with a little summary on what the google sheet contains and how it works, then I will give you guys a link that you can click to bring you to the google sheet, which you will then need to make a copy of, so that you can edit it and use it for yourself! So, what's even on this thing anyways? The sheet contains 14 key metrics when evaluating a company's health; more specifically their profitability, growth, stability (how they're leveraged, liquidity, etc.), whether their current stock price is overvalued or undervalued, efficiency of the companies operations, as well as some other more specific answers (or questions) that you could derive from these metrics. To the right of the column, titled "Nolan's Key Metrics" which contains all of the titles, it is followed by "Formula/Definition", "Explanation", "Good Benchmark", and lastly "Your Value". Below the 5 columns, to the bottom left of the sheet, there are a few charts giving you industry standards in terms of the efficiency ratios (A/R turnover, Inv. turnover, and Asset turnover), as these metrics are significantly more industry specific than the rest of the metrics. The final and most important section on this sheet, towards the bottom right of the sheet, is a colour coded box titled "Your Data", where you are going to input all of your specific companies financial data, to be computed into our metrics. I believe the first three columns at the top of the sheet are relatively self explanatory, but I want to quickly touch on how the last 2 columns work:
"Good Benchmark" - This column gives you a great GENERAL idea (every industry is slightly different) of what a healthy and potentially lucrative company should have in this metric. These range from percentage outputs (first 4 metrics), to text outputs (next 1 metric), and plain number outputs (last 9 metrics).
"Your Value" - This is the column where your numbers for whatever specific company you are evaluating will pop up, given the values you input in the "Your Data" box to the bottom right of the sheet. When typing your data into those "Your Data" boxes, I recommend first typing "=", then typing your numbers into the 'formula' version of the cells, to maintain the programs integrity. The "Your Value" column is where the magic happens, as I have conditionally formatted these cells to change color depending on what value appears; green = good/healthy, yellow = mediocre/sketchy, red = bad/unhealthy. We will touch more on this a bit later.
Next, speaking more to that "Your Data" box I mentioned, these are the numbers that you will have to go out and find for whatever company you are financially evaluating, and the good news is that they are all available on companies public financial statements that you can easily find online. The financial statements you will want to look for are the company's balance sheet, income statement, and statement of cash flows, which will all contain most of the information needed to calculate these metrics. I suggest using Yahoo Finance to find these statements, as they are all grouped together and very easy to navigate. Some of the information like enterprise value, book value per share, average inventory, etc. can be found simply by just googling them for the respective company. Realistically, all of these metrics could be found in their computed form on google as well, so if you wanted a quicker/simpler way to fill out the sheet you could hard code the "Your Value" into their cells and receive the colour coding, however, I believe to get a better and deeper understanding of a company's financial standing, it is good to know what the numbers actually are that you're computing, as well as the fact that hard coding the "Your Value" cells will remove the program within them that computes the numbers from the "Your Data" box. All together there are 18 different data types which should take no longer than 20 minutes to find and fill out, which gives a little over one minute per data entry, and is quite generous considering most of these values can be found on the same few financial statements, and should take no longer than 10-20 seconds to copy and paste over.
The only cell in "Your Values" that you HAVE to hard code in is the Free Cash Flow (FCF) cell, which is very easy to find on a company's statement of cash flows. When hard coding this cell you either write "Yes", which warrants a green code, "No", which warrants a red code, and "Half", which warrants a yellow code (e.g. positive but declining year over year).
Okay, hopefully you got all of that, and if not, please feel free to shoot me an email with any questions or inquiries about the sheet to nolansnotions@gmail.com, and I will be happy to provide any of you with some explanations or help regarding the sheet. The sheet is currently already filled out with an evaluation of PZA as an example, and here is the public link to the google sheet:
Please remember, once you open the sheet, to actually edit and use it for yourself you're going to have to click 'file' > 'make a copy' > and then use your own copy to edit in your numbers and specific company information. If you ever mess up the sheet programming and don't know how to fix it, you can always return to this link and make another copy!
Alright, you know what the sheet contains, a good general idea of how to use it and what you're looking for, now, why does it actually work in providing valuable financial information, in regards to whether a company is a good investment decision or not? As mentioned before, these 14 metrics are widely recognized across the entire finance industry as the most important financial metrics to evaluate a company's profitability, growth, stability, efficiency, and much more, giving you a very well rounded view on the overall financial health of a company. What you do with the information gained from this sheet is completely up to you, but I highly suggest looking deeper into each metric you obtain as sometimes they pose a deeper question to the company's financials, rather than an answer.
I know, there are much better, more complex, more automated, and more credible financial evaluation sheets out there, however, the point of this one is to be able to give you guys a user friendly sheet for anyone of all skill levels, that provides well rounded insights to a company's financial health, and can be used as legitimate data into deciding whether an investment is a good or bad idea. I plan on developing more complex, more automated, and more valuable sheets in the future, so subscribe to the newsletter to stay posted for when those posts drop!
As for now, thank you all very much for reading, I hope that if you choose to use, or at least try out the sheet for yourself, that you enjoy it! If you have any feedback/criticism, questions/concerns, or anything in between, please shoot me an email at nolansnotions@gmail.com, and don't forget to subscribe to our newsletter at the bottom of the page! Talk to you all in the next post,
Nolan Kushnir.
Google Sheet Organic Link:
Comments