Custom Filters

While the Screener comes with a host of in-built filters that you can use to shortlist stocks, it also gives you the ability to create your own filter. The Custom Filter feature is available to all users.

A custom filter is a stock filter that has been created by a user. Such a filter can be created by using two to five data items on Screener. Custom filters are useful because they allow you to dig deeper into the stock universe and search for companies that match your specific criteria.

While the default filters are more than useful for most users to filter stocks, savvier users can create custom filters to be able to carry out deeper research.

Let’s understand this with the example of Quick Ratio, which is a custom filter that you can create on Screener. Quick ratio is an extension of the existing filter–Current Ratio.

Current ratio is a measure of a company’s ability to pay off its debts.

Current ratio is calculated as current assets divided by current liabilities. If the current liabilities of a company are lower than its current assets, it means that the company has sufficient assets (cash in bank, receivables, etc) to pay off liabilities like interest on loans as and when required. Hence, the higher the current ratio, the better a company is equipped to repay liabilities on time. A higher current ratio depicts good financial health of the company.

While current ratio tells us how likely a company is to pay off its debts in the near term, it doesn’t take into account an important factor, which is the company’s inventories. This is where Quick Ratio comes into the picture.

Quick ratio = (current assets – inventories) / current liabilities

Here, inventories are important because it is difficult to sell then quickly and use the cash to pay off a company’s debt. A company’s ‘quick assets’, which are assets that can be used immediately are a more accurate gauge of how likely a company is to pay off the debt. Inventories are assets, but cannot be used in the near future. Hence, quick ratio goes one step ahead of current ratio and removes inventories from the equation.

Quick ratio is one custom filter than can be created on the smallcase Screener by using three data items–current assets, current inventories and current liabilities. There are many other data items that can be used to create other custom filters.

Creating a custom filter

To create a custom filter, you have to click on the ‘Add Filter’ button and then go to the ‘Custom’ option on the top.

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You can then type in the data items you need in your filter and create it. You can give the filter a name of your choice and verify it as well.

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All of your custom filters appear under the ‘Your Filters’ tab.

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This is how you can create and use custom filters on the smallcase Screener to build a portfolio of stocks that fit your needs and ideas.