Financial Forensics End-term Project

Dalal Street
Total Marks 25

The goal of this project is to assess your capability in understanding financial

statements/ratios of companies and judge their future performance. You are provided with
several metrics of all the companies listed in BSE covering aspects of their Balance Sheet, P&L
Statement, Cash Flow Statement and other financial ratios, along with the market price of
each of the stock at timestep T1 and T2. You are given a budget of INR 10,00,000.

Problem Statement:
• Analyze the data given for all the companies and create a portfolio within the given
budget of INR 10,00,000 as of time-period T1.

Input and Constraints

• You have been provided with several metrics of all the companies listed in BSE
covering aspects of their Balance Sheet, P&L Statement, Cash Flow Statement and
other financial ratios, along with the market price of each of the stock at time-period
T1 and T2.
• Your total portfolio cost should be less than the allotted budget of INR 10,00,000.

Evaluation
There will be two parts of evaluation:
• Your portfolio will be evaluated as of time-period T3, and a score will be given based
on the profit/loss your portfolio made.
Details of the score computation is covered in the section score calculation.
• Your team will be required to make a presentation with your final portfolio, outlining
a detailed analysis that you did.

Score Calculation:
a) Your submitted portfolio will be evaluated based on the following approach:
• The profit/loss for each of your stocks in the portfolio is computed as of time-period
T3
• Individual profits/losses are added to arrive at the portfolio performance
• For example:

Company Name Units Price as of T1 Price as of T3 Profit/Loss

(Buy Price) (Sell Price)
ABC 2 100 150 100
PQR 10 80 60 -200
 XYZ 5 1000 1200 1000

For the above table we compute:

• Portfolio Cost (PC): 6000
• Final Portfolio Value (FPV): 6900
• 𝑃𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝐷𝑒𝑙𝑡𝑎 (𝑃𝐷) = 𝐹𝑃𝑉 − 𝑃𝐶
▪ PD = 6900 – 6000 = 900
𝑃𝐷∗100
• 𝑃𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝐺𝑎𝑖𝑛/𝐿𝑜𝑠𝑠 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 (𝑃𝐺𝑃) = 𝑃𝐶
▪ PGP = 900 * 100/6000 = 15%

• A “Base Score” of 80 will be set and your Portfolio Performance Score from your
submission will be evaluated using the below formula:
o 𝑃𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒 𝑆𝑐𝑜𝑟𝑒 (𝑃𝑃𝑆) = 𝐵𝑎𝑠𝑒 𝑆𝑐𝑜𝑟𝑒 +
𝑃𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝐺𝑎𝑖𝑛/𝐿𝑜𝑠𝑠 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒

o For the above table, the Portfolio performance score will be, PPS = 80+15
= 95

• Portfolio Performance Score will be capped at 100 and ceiled at 0.

• This score will be same for everyone in the group.

b) Based on your team’s presentation a Presentation Score is given between 0-100. You will
be evaluated on the grounds of novelty, rigor, ability to connect different data points in
your final presentation.
c) A calibration score is obtained from your group to account for the difference in efforts
put in by the team members and to measure the effectiveness of collaboration in
completion of the project. This is to ensure that no one free rides on anyone's effort and
to promote team collaboration. Calibration score effectively captures what percentage
of marks should be given to an individual from the overall team’s score. It’s a list of
values having a size equal to the group size and summing to 100. Each value in it will
correspond to a students’ share in the final score. An example is shown below:

Student-ID Score_Share
Student 1 40%
Student 2 30%
Student 3 30%

d) Based on the above Portfolio Performance Score, Presentation Score and the Calibration
Score three components will be derived capturing the group’s absolute performance (A),
an individual’s contribution in the respective group (B) and the group’s collaboration
with respect to other groups (C). An individual’s final score is computed as follows:
• Group’s absolute performance (A)= 0.5 * Portfolio Performance Score + 0.5*
Presentation Score. This score is same for everyone in the group.
• Individual’s contribution in the respective group (B) = Min-Max scaling will be
done on the submitted score_shares of the students with Min being 0 and Max
 being 25. This score is different for everyone in the group. If everyone in the
group has an equal share, then everyone in the group will get a score of 25.
• Group’s collaboration with respect to other groups (C) – Standard deviation (SD)
of the group’s score_share is computed and is compared against the same of
every other group. A reverse Min-Max scaling will be done to map the lowest SD
to 25 and the highest to 0. This is done to promote the teams to collaborate
more, the team that does the highest collaboration will be rewarded. This score
is same for everyone in the group.
• An individual’s Final score is computed as follows:

Final Score = 0.5* A + A*(B + C)/100

Refer the attached excel workbook for a worked-out example of the score
computation.
• Also, incase if there is/are any individual(s) whose score_share is less than 5% as
per the calibration score, then the individual(s) will get a Final Score of 0 and
none of the above calculations will be applicable. And those individual’s
score_share will be equally distributed amongst others in the group and the
scores will be computed accordingly.

Submission Format:
● We expect a single zip file, with the naming convention as <team_id>.zip containing
two csv files from every team with the following information:
o File Name: <team_id>_score_share.csv

Student-ID Score_Share
Student 1 Roll No Student 1’s
share
Student 2 Roll No (student share
information)
Student 3 Roll No -do-

o File Name: <team_id>_portfolio.csv

BSE Code NSE Code Company Name Units
123 ABC 2
456 PQR 4
789 XYZ 6
*** ** **
*** ** **

For instance, if your team is provided with a team id of team_03 then, your submission will
be team_03.zip. The zip file will contain team_03_score_share.csv and
team_03_portfolio.csv
Important Dates:
● Problem Statement Overview: 10th Nov 2024
● Project Start: 10th Nov 2024
● Team and Team Leader Nomination: 15th Nov 2024
● Team Finalization: 22nd Nov 2024
● Submission Deadline: Before 10th December 2024
● Final Presentation: 14th/15th December 2024

Other Instructions:
● Students can form their own team of size 3 and communicate the same to us (please
send an email [email protected].
● Each team should nominate a team leader who will be responsible for making the
final submissions.
● For the <team_name>score_share.csv file, we request the team leader to consult
with the entire team and get their approval via an email before making the final
submission. In case if the score share is challenged by any of the team members, and
if the team leader fails to submit an email proof of the team members consent on
the score distribution, then the team will be disqualified and everyone from the
team will be awarded no marks for the project.
● In case your portfolio cost is over INR 10,00,000, the costliest stock(s) will be
removed from your portfolio till the total portfolio cost is less than the budget while
running the evaluation.
● After teams have been formed incase if the team members decide to expel a team
member due to inactivity the same should be done before 15th November 2024. No
changes will be entertained post that.