Growth and valuation ratio, Finance Basics

Growth and Valuation Ratio

This ratio indicates the growth potential of the firm in addition to determining the value of the firm and investment made via various investors.  They contains the following:

a) Earnings per share EPS  = Earnings to Ordinary shareholders/No. of ordinary shares

These ratios signify earnings power of the firm that is how much earnings or profits are attributed to every share held by an investor.  The higher the ratio the improved the firm.

b) Earnings yield (EY) = (Earnings per share/ Market price per share) x 100

  1. The market price per share or MPS is the price at that new shares can be bought from the stock market.
  2. These ratios hence signify the returns or earnings for every single shilling invested in the firm.

c) Dividends per share (DPS) =      Dividend paid /No. of ordinary shares

This signifies the cash dividend received for every share held by an investor. Whether all the earnings attributable to ordinary shareholders such were paid out as dividend, then EPS = DPS.

d) Dividend Yield (DY) =  (Dividend per share/ Market price per share) x 100

Or Dividend paid /Market value of equity

    Whereas market value of equity = No. of shares x MPS

  1. This ratio signifies the cash dividend returns for every one shilling invested in the firm.
Posted Date: 1/30/2013 2:12:20 AM | Location : United States







Related Discussions:- Growth and valuation ratio, Assignment Help, Ask Question on Growth and valuation ratio, Get Answer, Expert's Help, Growth and valuation ratio Discussions

Write discussion on Growth and valuation ratio
Your posts are moderated
Related Questions
Type of Partners 1) Active Partner 2) Sleeping Partner 3) Quasi or Nominal Partner 4) Minor Partner 5) Major Partner 6) In-coming Partner 7) Out-going Partner

Question: a) An oil well now produces 75000 barrels per year. The well will produce for 21 years more, but production will decline by 3.7% per year. Oil prices however, will in

What is the market price of a share of stock for a firm that pays dividends of $1.20 per share, has a P/E of 14, and a dividend payout ratio of 0.4?  market price of a share

jack needs to borrow $1000 for the next year. Bank south will give him the loan at 9%. Suncoast will give him the loan at 7% with a $50 loan orgination fee. First national will giv

#what is an interest?

For the set of activities shown in the table below, draw the total expenses vs. time curve using the following data: The labor rates are as follows: Labor # 1 (L1) rate = 30


For this assignment you are acting as a financial analyst for Apple Inc. Apple Inc. Is one of the most innovative companies worldwide. For example, in November 2012 Apple sold 3 mi

Payback Period Method - Traditional Methods This method gauges the viability of a venture via taking the outflows and inflows over time to ascertain how soon a venture can pay

Example of NPV Method Resolution limited intends to purchase a machine worth Shs.1, 500,000 that will have a residue value Shs.200,000 after 5 years helpful life. The saving