I am trying to understand the 10.2 Quick Formula with Detailed Examples – from the book:- How to Avoid Loss and Earn Consistently in the Stock Market.

Could u please clarify below 3 doubts on it

**First step:-**

Last three years average Return on Equity (ROE) and Return on

Capital Employed (ROCE) both are greater than 20%.

2. Debt to Equity Ratio is less than 1. (or heavily reducing for the last

few years)

3. Promoters pledge less than 10% of their total shareholdings, or there

is a clear indication that it will fall below 10% soon. (better if it is

NIL)

4. Last three years CAGR sales growth rate is more than 10%

5. Last three years CAGR profit growth rate is more than 12%

**Is my below screener formula is correct? I got 162 results and in the book they mentioned we will get around 40-80 stocks.Am I missing anything?**

Average return on equity 3Years > 20 AND

Average return on capital employed 3Years > 20 AND

Sales growth 3Years > 10 AND

Profit growth 3Years > 12 AND

Pledged percentage <10 AND

Debt to equity <1

clarifications 2:-

“If the stock under consideration has P.E ratio of more than two times of last

three years average EPS growth then avoid the same.”

For detailed clarification and logic, you can refer Chapter 5.

**Is below thing is correct?**

Price to Earning <Historical PE 5Years AND

PEG Ratio <2

**clarification 3:-**

If last three years annualised return is less than 10% and last one

year’s return is negative then mark as “Avoid”.

2. If last three years annualised return and last one year’s return both are

negative then avoid the stock.

3. Only consider stocks for investment having last three years

annualised return is more than 10% with last one year’s return is

positive.

**Do I need to consider Return over 1year,Return over 3year for the above things or something different?** Is my below formula is correct

Return over 3year >10 and

Return over 1year>0