Shareholder value, Financial Management

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SHAREHOLDER VALUE

There are various measures used by market analysts and financial experts to derive the maximum Shareholder Value of a particular company but we would take the following broad measures for our understanding of the Company better.

 

i.             Earnings Per Share (EPS)

EPS = Profit after Tax / No. of Equity Shares

 

ii.            Book Value (BV)

BV = Net Worth / No. of Equity Shares

 

iii.           Market Capitalisation (MC)

MC = Market Price of a unit of Share x No. of Equity Shares

 

iv.           Price to Earnings per Share (P/E)

P/E = Market Capitalisation / Profit after Tax

 

v.            Price to Book Value per Share (P/BV)

P/BV = Market Capitalisation / Net Worth


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