If you buy a stock, using data to drive your decision? Have you ever been in the analysissection of the essential information of an action and it was lost? In this paper, we will do some of the most important and how to use them to make more informed decisions.
SEE: 5 Must-Have Metrics for value investors
The Return on Investment
The return on investment (ROI) is simply themoney a company made or lost on an investment. If an individual investor were to invest later to $ 1,000 in shares of McDonald and five years, sold it for $ 2,000, which is a 100% return on investment or ROI had. The return is due to the cost of investment in order to produce the ROI divided. The problem with this measure is that it is easy to handle. Although the calculation is just what the company decides to change the cost of the investment can belong. Do they include all costs in the calculation or elected? Before relying on the return on investment, was calculated as.
Earnings per share (EPS)
EPS is a measure of business performance. Take the profits, dividends and subtract this number is divided by the number of outstanding shares. Although EPS tells investors how much money the company has earnings per share, but no information on pricing. If a company earned $ 10 per share and a profit of $ 12 per share, the profit of the company is the second most impressive, if you spent the same money or less in order to generate revenue. Use EPS in conjunction with other measures such as return on equity.
Price-earnings
The price-earnings (P / E Ratio) compares the current price of the company’s earnings per share. The P / E is calculated by dividing the price per share divided by earnings per share. This measure is one of the best ways to measure shareholder value.
If you are considering buying a new TV, you can compare features and prices of several televisions. One would expect to pay more for additional features. If television had fewer features and more technology, but cost as much or more than other TVs that cannot television be a good value.
When a population is a P / E ratio than other similar companies have investors can view shares as overvalued, unless the company has significant opportunities for growth or something else that the high P / E makes its money. Remember that the actual price of a share is not an indication of the value. A population of a higher price could be less valuable if the P / E is investigated.
Return on Equity
Return on equity (ROE) measures the profitability of a company. Shows the effectiveness of a company’s profit. To calculate ROE, earnings divided by the amount of investing capital or the total amount of money into the company. If Company A had had a profit of $ 2 million, but will receive $ 1,000,000 of shares which may be more effective than company B, which is also $ 2 million, but there was one, 5 million in equity. Company A is more efficient because they can make more money with less investment.
The price-earnings (P / E Ratio) compares the current price of the company’s earnings per share. The P / E is calculated by dividing the price per share divided by earnings per share. This measure is one of the best ways to measure shareholder value.
If you are considering buying a new TV, you can compare features and prices of several televisions. One would expect to pay more for additional features. If television had fewer features and more technology, but cost as much or more than other TVs that cannot television be a good value.
When a population is a P / E ratio than other similar companies have investors can view shares as overvalued, unless the company has significant opportunities for growth or something else that the high P / E makes its money. Remember that the actual price of a share is not an indication of the value. A population of a higher price could be less valuable if the P / E is investigated.
Return on Equity
Return on equity (ROE) measures the profitability of a company. Shows the effectiveness of a company’s profit. To calculate ROE, earnings divided by the amount of investing capital or the total amount of money into the company. If Company A had had a profit of $ 2 million, but will receive $ 1,000,000 of shares which may be more effective than company B, which is also $ 2 million, but there was one, 5 million in equity. Company A is more efficient because they can make more money with less investment.
ROE should always be used in conjunction with other measures to assess the power of health and profits of an enterprise.
CAGR
Growth rate (CAGR) measures the annual growth rate of investment. Can see significant gains in recent years, while in other years, a loss of what might come back even more useful for investors to consult their taxes, on average, over time, rather than every year. If you have a portfolio of rental properties and some of them had. After calculating the average, you can increase your investment in the kind of investment that returns over the TCCA. The calculation is somewhat complicated, but this can be calculated.
Baseline
Successful investors are well informed and evaluate the ability of a company with these and other indicators. Look for these indicators in the action of fundamental analysis and decide for yourself if a company is an investment worth
CAGR
Growth rate (CAGR) measures the annual growth rate of investment. Can see significant gains in recent years, while in other years, a loss of what might come back even more useful for investors to consult their taxes, on average, over time, rather than every year. If you have a portfolio of rental properties and some of them had. After calculating the average, you can increase your investment in the kind of investment that returns over the TCCA. The calculation is somewhat complicated, but this can be calculated.
Baseline
Successful investors are well informed and evaluate the ability of a company with these and other indicators. Look for these indicators in the action of fundamental analysis and decide for yourself if a company is an investment worth
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