PosiStep 20: Your first complete company analysis
This is the last PosiStep. You will see the full research checklist applied to one made-up company and learn to write a short balanced note. After this step comes the PosiCourse final exam, which earns the rainbow completion badge.
The 10-question checklist, in one place
From PosiStep 19: what the company does; its size; growth; balance sheet; cash; valuation against peers; ownership; flags; official news; and what could go wrong. Each question uses ideas from earlier PosiSteps, and each has a matching tab on PositoAI.
Worked example: Lotus Electricals (made up)
Lotus Electricals is an imaginary company with made-up numbers, used only to show the method. The box below answers all ten questions for it in a few lines each. Notice that the answers include both good and worrying points.
Writing a balanced note
After the checklist, write four or five sentences: what the company is, what looks strong, what to watch, and what you would check next. For example:
"Lotus Electricals is a PosiCap Mini electricals maker growing revenue about 11% a year with low debt (Owes vs Owns about 0.29). Most profit turns into cash, and its P/E is below similar companies. To watch: money owed by customers is rising faster than sales (a yellow flag), copper costs, and the loan for the new factory. Next: check the coming two quarters' cash flow and receivables."
A balanced note avoids words like "sure", "must" or "guaranteed". It records your understanding today, so you can compare it with what actually happens.
Where to go from here
Next comes the PosiCourse final exam: 8 questions, two from each week. Answer all 8 correctly to earn the rainbow completion badge.
Practise the checklist on companies whose products you know. Keep a few on your Watchlist and revisit your notes after results. Read one annual report end to end. Revisit any PosiStep whenever a term feels unclear; the course stays free and open.
For decisions about your own money, consider speaking with a SEBI-registered Investment Adviser (or a registered adviser in your country).
Worked example: the 10-question checklist
- What does it do?Makes fans, switches and wires, sold through dealers across India.
- How big is it?Market cap ₹6,000 Cr, so PosiCap Mini (₹1,000–10,000 Cr).
- Is it growing?Revenue ₹2,000 Cr to ₹3,000 Cr in 4 years (about 11% a year); net profit ₹150 Cr to ₹240 Cr.
- Is the balance sheet strong?Total liabilities ₹600 Cr (including ₹300 Cr of debt) against total assets ₹2,100 Cr: Owes vs Owns about 0.29, low.
- Does profit turn into cash?Operating cash flow ₹200 Cr against profit ₹240 Cr: mostly, but money owed by customers is growing.
- How is it valued against peers?P/E 25 against a peer median of 35; ROE 16% against peers' 18%; P/B 4.
- Who owns it?Promoters 55%, steady for years, none pledged; institutions slightly increasing.
- Any flags?No red flags. One yellow flag: receivables growing faster than sales.
- What does official news say?A new ₹250 Cr factory, partly funded by a loan; a few large orders from builders.
- What could go wrong?Higher copper prices squeezing margins, stronger competitors, factory delays, and customers paying late.
Key terms
- Research checklist
- A fixed list of questions to answer before forming a view on a company.
- Balanced note
- A short written summary of strengths, risks and what to check next, with no predictions.
- Receivables
- Money customers still owe the company for goods already sold.
- Capex
- Money spent on long-term assets such as a new factory.
Try it
Which note about Lotus Electricals is the most balanced?
Option 3 records strengths and risks without predicting or advising. The others are predictions, emotions or price-chasing.
See it live on PositoAI
Pick a real company whose products you use, open its PositoAI page and answer the ten questions using Overview, Go Deep, Funda, Pattern, PosiFlag, Actions and News. Write your balanced note, then use Inform to share the company page with a friend who is learning too.
What this does not tell you
One checklist does not make anyone an expert, and a careful analysis can still turn out wrong. This course teaches how to read and question information; it does not tell you what to buy or sell.
Quick quiz
What is the main purpose of a research checklist?
A checklist makes sure the same important questions are asked for every company, so nothing big is missed.
Which word does a balanced note avoid?
Words like "guaranteed", "sure" or "must" turn a note into a prediction. A balanced note records facts, risks and questions.
Why is "receivables growing faster than sales" a yellow flag for Lotus Electricals?
If money owed by customers grows faster than sales, more of the profit is still on paper. Cash flow shows whether it is collected.
Lotus has total liabilities of ₹600 Cr and total assets of ₹2,100 Cr. What is its Owes vs Owns?
Owes vs Owns = total liabilities ÷ total assets = 600 ÷ 2,100 ≈ 0.29. It owes about ₹0.29 for every ₹1 it owns.
Before making a decision with your own money, what is the most sensible step?
Your own research plus, if needed, advice from a registered adviser is far safer than tips or rankings alone.
Answer every question on this page correctly to complete this PosiStep.
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PosiCourse is for education only. It does not recommend buying or selling any share. Examples with made-up numbers are not real companies. PositoAI is for research and education only and is not investment advice.