• Home
  • Quantitative Analysis And Long Term Ratio Analysis Of Stocks

Quantitative Analysis And Long Term Ratio Analysis Of Stocks

Detailed Analysis and Comparison


What is Quantitative Analysis?

Quantitative Analysis of stocks is a technique that uses mathematical and statistical modeling, functions, formulas, and measurements to understand the behavior of a particular set of data or a variable. It is an approach that uses mathematical and statistical analysis to help determine the value of a financial asset, such as a stock, mutual fund, commodity, forex, or an option. This analysis is based on the historical movements and historical prices of the financial assets.
It is a process of collection, classification, and interpretation of measurable and quantifiable numerical data. With the era of improving data technology and data analysis, quantitative analysis is now considered a better approach to making risk-leveraged decisions.
This analysis help investors and traders find out investment opportunities and various techniques and trading strategies which they can use to trade in financial assets. It also helps to find out the perfect time to enter and exit the market.
Quantitative Analysis (QA) of stocks in financial markets is mainly based on ratios for investing in stocks.
In this article, we will study how to do a Quantitative Analysis of stocks using various fundamental ratios in the MarketXLS software. This blog is based on a combination of two of our templates.
The templates are:
Ratio Analysis Long Term Fundamentals
• Quantitative Analysis of Stocks
Let us study both of them in detail.

Ratio Analysis Long Term (Fundamentals)

Investors can look at various fundamental ratios and figures to gauge the strength of stocks and the potential to generate returns in the future. This template covers three areas of fundamental analysis and provides a good comparison with the industry peers entered by the user.
User needs to enter the company ticker and competitors in the same sector/industry to analyze and compare the companies on the following parameters:
1. Return Ratios
2. Valuation Ratios
3. Cash Flow Ratios
4. Fundamental/ Financial Indicators

‘Index’ Sheet

Index Sheet

Enter Stock Ticker in cell ‘E6’ and the year of analysis in the cell ‘E8’ of this sheet to get the result summary. This result summary gives you information on crucial return ratios, key financial indicators, key valuation ratios, and critical cash flow ratios of the company. In this example, we have taken ‘Google’ as our targeted stock.
For detailed analysis and comparison, you can switch to the Active Template worksheet.

‘Active Template’ Sheet

Active Template sheet

For getting a detailed analysis, you have to enter the stock ticker in cell ‘F4’ and the year of study in cell ‘F8’.
You will get an overview of the stock and four tables and graphs showing analysis and comparison of the stocks’ various ratios with the different ratios of other stocks, which are its industry peers.

Detailed Analysis and Comparison


Quantitative Analysis of Stocks

Quantitative Ratio Analysis is used to measure a group of stocks through a bunch of vital fundamental ratios. These ratios are some important ratios covering all perspectives of stock from valuations, margin, and earnings.
A quantitative analysis is required to gain a complete picture of the company’s performance. It is also essential to compare the stock with other stocks in the same industry to gain more insight and compare on a true scale.
Hence, the most important rationale for using this is to facilitate comparison between various stocks and gain more insight.

‘Index’ Sheet

Quantitative Analysis of Stocks

Enter Year in cell E7 and Stock Ticker in cell E9, E11, E13 E15 & E17 of this sheet to get the result summary.
The template will return the result of the stock’s comparison and analysis in the cell ‘E19’. The result is calculated based on a detailed comparison made in the ‘Calculations’ worksheet.
In this example, we have taken the base year as 2019. The five stocks under analysis are Facebook, Apple, Amazon, Netflix, and Google.
According to the analysis made by the software, the best stock to pick would be Apple. (NYSE: AAPL)
(These templates do not account for any professional advice but are merely some guidelines to explain the concept. It would be best if you did NOT make your investment decisions solely based on these templates. Past performance is not a guide for future performance.)
For detailed analysis, comparisons and calculations, you can shift to the ‘Calculations’ sheet.

‘Calculations’ Sheet

Calculations sheet for detailed analysis

This sheet contains a detailed analysis of all five stocks.
The first table covers the following information about the stocks:
• Sector
• Industry
• Market Capitalization
The second table contains information on various ratios and stocks, which helps in gaining an insight into the fundamentals of the respective companies.
The third table provides an overview of the analysis by giving each ratio of a stock a score on a scale of five. The scores of all the ratios of each stock are totaled, and the final result is calculated. The stock with the maximum score is displayed as the ‘Best Stock To Pick’ in the cell ‘C33’.

The Bottom Line

You can build your own strategy, which involves the use of both of these templates. Both the templates provide a deep insight into the fundamentals of the company and facilitate peer comparison. Both the templates are helpful in their own way.
The templates provided by the software help investors and traders in Quantitative Analysis of stocks and help in comparison of multiple stocks using some key fundamental ratios.
Both the templates would prove to be very useful if used wisely and strategically.


None of the content published on marketxls.com constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.
The author is not offering any professional advice of any kind. The reader should consult a professional financial advisor to determine their suitability for any strategies discussed herein.
The article is written to help users collect the required information from various sources deemed to be an authority in their content. The trademarks, if any, are the property of their owners, and no representations are made. All trademarks referenced are the property of their respective owners. Other trademarks and trade names may be used in this document to refer to either the entity claiming the marks and names or their products. MarketXLS disclaims any proprietary interest in trademarks and trade names other than its own or affiliation with the trademark owner.





{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}