ValuTool - Company Information

The key to getting good valuations out of ValuTool is to put good numbers into it. When you choose "New Stock", ValuTool will present you a screen full of blanks for you to fill in. These are all "raw data" numbers, available from Morningstar, Edgar, S&P and any number of other sources. (We've provided links to some of these sources on the main ValuTool page.)

Try to get the best information you can find, since these raw numbers will be the basis for all of the valuation computations that ValuTool will take you through. The more accurate you are here, the better picture you will be able to develop later.

Computed Values
Some of the information on the Data Entry Screen is computed (as opposed to entered). ValuTool will not let you change these computed spaces directly, so the only way to affect them is to change the values that go into the computations.

For example, the Market Cap is computed by taking the current price of a stock and multiplying it by the number of shares outstanding. ValuTool will not let you directly change the Market Cap number, but that number will be changed as you change the number of shares and the price of the stock.

You'll be able to quickly identify which values are computed since ValuTool places a red dot next to the values that you cannot change directly.

Company Information
While it makes no difference in what order you enter all of the data into ValuTool, there is a logical progression which makes sense. The first step, then, should be to enter in all of the general company information. This includes information about the company name, ticker symbol, phone number, and the date that you're entering the information.

The date you use should be the date you enter the information, not the date on any of the reports. By entering the current date, you'll be able to know at a glance later on whether or not the information needs to be updated.

General Stock Information
The next step is to enter all of your General Stock information. This information is easily acquired from any number of places and includes the number of shares outstanding, the current price for the stock, the dividend and the book value.

As with all data entry in ValuTool, you should not use dollar signs, fractions or commas, since it is easier for ValuTool to misinterpret data that is entered that way. If the share price is $27 5/8, you should simply enter 27.625. (Determine the decimal equivilent by dividing the fraction and then adding the whole number... so 5/8 = .625, .625 + 27 = 27.625)

Earnings & Revenue Information
Moving on, you should now enter all of your Earnings & Revenue information. This information can be found in various places. ValuTool is looking for earnings by quarter for the last 8 quarters, earnings by year for the past 4 years, and revenues by year for the last 4 years.

You should also enter information about profit margins for the last 4 years. Enter the number as a decimal (the percent divided by 100). For example, if the company had 14% profit margins, you would enter .14.

The earnings and revenue section is crucial for most of the backward looking valuations, so try to be as careful as possible in data entry. Remember, do not enter dollar signs, fractions, percent signs or commas, as they might throw off your ValuTool Calculations.

Balance Sheet Information
The final raw data entry necessary to fill in your ValuTool Data page will be all of the Balance Sheet information. This will require you to tell ValuTool about cash flow, debt and assets. Of all of the raw data required, this is the information that will take the most thought on your part. What a company considers assets, you may not choose to take into account as assets. What the company considers long term debt, you might consider short term, and vice versa.

Toward this end, I cannot offer a stronger recommendation than to spend time in the Reading Financial Statements Folder. The Fools there have done a wonderful job of explaining some very helpful ways of understanding why companies report what they do in the way that they do, and how you can best make sense of a lot of numbers to come up with real numbers which will lead to real valuations.

You might also want to spend some time in the collection of articles called A Journey Through The Balance Sheets, or in the Fool's School, reading about How to Value A Stock.

As always with ValuTool, avoid dollar signs, commas and fractions.

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