Ratios stock market

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In some organizations top management bonus are linked to the share price in the stock market. Earnings Per Share EPS. Investors would like to know how much profit is generated by each share they hold and EPS provides this valuable information. The market fetches higher prices for high profit growth companies. Small capitalization companies with high profits will naturally show attractive EPS.

A PE of 10 means that the share is trading at 10 times its earnings. Higher PE ratio shows investor optimism towards the company and vice versa.

Global Stock Market Valuation Ratios (Shiller PE, CAPE, PB)

Measures the earnings capability of an ordinary share relative to its market price. Profitable companies carry attractive earnings yield. The amount of cash dividend calculated on a per share basis. Investors have two modes of return from investments namely dividend and capital gains.

Dividend is regular income while capital gains are appreciation of share price over time. Capital gains are materialized when disposing the shares. However, investors differ in opting for dividend or capital gains.

Some investors prefer dividend over capital gains and some vouch for capital gains. Investors who invest for regular income are keen to look at the dividend per share. Whereas corporate investments are intended for capital growth in a general sense. Dividend return per share relative to its market value.

This is calculated in the same manner as earnings yield. This ratio indicates what percentage is paid out as cash dividends out of net earnings. Generally companies pursue a dividend policy that determines the pay-out of dividends.

Book Value Per Share. This ratio represents the equity of the firm on a per share basis and is sometimes used as a benchmark for comparison with the market price per share. The focus is on how close market value is to book value.

Price to Book Value. Relates the market price of a share to its book value. This ratio compares the book value of the share with the market value to show the strength of the share i.

Price to book value of more than one means that the investors are willing to pay higher than their accounting book value. Well performing company shares generally trade at multiples of its book value. Wednesday, Jun 21, Browse Content Exam Review Search Content Search Quiz My Notes My Bookmarks Contact us Help googletag.

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Here’s why you should never try to time the stock market - MarketWatch

Browse Content Exam Review Search Content Search Quiz My Notes My Bookmarks Contact us Help. Earnings Per Share EPS Investors would like to know how much profit is generated by each share they hold and EPS provides this valuable information.

Total No of Ordinary Shares Outstanding. Market Price Per Share. Market Value Per Share. Total No of Ordinary Shares. GulfBase GCC Index googletag.