We are what we are !!

 Edward Altman published the Z score formula for predicting bankruptcy way back in 1968. He said this formula can be judiciously used to find whether any company may go into bankruptcy within the next two years. It is a quick find formula to gauge the financial health for publicly held companies by using the P&L values and Balance sheet values through a mix of business ratios. In simple terms Z =1.2X1+1.4X2+3.3X3+0.6X4+1.0X5, where X1= Working capital/Total assets.i.e the ratio of liquid assets in relation to the total assets or size of the Co. X2=Retained earnings/Total assets i.e the ratio of retained profit in relation to the total assets of the Co. X3=EBIT/Total Assets i.e the ratio of efficiency of the operations without the impact of leveraging, in relation to the assets deployed in the Co.also signifying the importance of operating earnings for the long term financial health of the Co. X4=market capitalisation/book value of total liabilities i.e the ratio of market price...

  We have had four lockdowns and unlocks across the country.To start with it was Complete lockdown, which struck like a bolt from the blue starting from March 24th till May 31st 2020. Many prominent opposition leaders severely criticized the Govt for this lockdown accusing Modi of dictatorship tendency throwing the hungry, poverty-stricken, migrants on the streets and pavements uncared for. The second lockdown little relaxed was in June as experimentation and once the pandemic started spreading wildly, Govt. was again back to stricter lockdowns. But by the end of june, Central Govt realized that the question of livelihood was becoming important and advised staggered unlocks. But many states ruled by opposition leaders taking a holier than Centre attitude continued with strict lockdowns introducing epasses even for intrastate movements, imposing restrictions like total lockdowns during weekends making life difficult for the common man. There was a tough competition between states as...

Policy prescriptions are flying thick and fast and on my part, I am adding one more . All Economists including me are prescribing deficit monetisation, pump priming etc. taking a leaf out of Modern Monetary Theory. As against this,Central Govt. has an alternative which is called Asset monetisation, according to me.Govt calls it Disinvestment/Divestment of PSUs. When the whole world is reeling under Covid pandemic , will there be a suitor for Air India? Even if there is a good buyer will he be willing to pay the right price for Air India.What will be the benchmark for its valuation when the whole industry is bogged down by this pandemic and its repercussions on the travel industry. In such unprecedented situations , it is best advised not to go in for outright sale transactions of Government stake in PSUs including Air India, BPCL,etc. Similarly, other intangible but real assets are Spectrum waves ( link ), Mining/Abiotic  ,Biotic Resources which are hidden inside the Ear...