1. Public Market Perspectives
Investment ratios help shareholders and stock market analysts evaluate the financial returns and equity valuation of listed corporate entities.
2. Core Market Formulas
- Earnings Per Share (EPS): Measures the net profit earned on behalf of each individual outstanding common share.
“EPS” = “Net Profit Available to Common Shareholders”/”Weighted Average Number of Common Shares Outstanding”
- Price-to-Earnings (P/E) Ratio: Measures stock market expectations. It shows how much investors are willing to pay per dollar of current corporate earnings.
P/E Ratio=Current Market Price Per ShareEarnings Per Share (EPS)
- Dividend Yield: Measures the cash return provided by a share investment, independent of capital gains from stock price changes.
Dividend Yield (%)=Dividend Per ShareCurrent Market Price Per Share×100