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In his book The 21 Irrefutable Laws of Leadership, John Maxwell says that becoming a leader is a lot like investing successfully in the stock market. If you hope to make a fortune in a day, you won’t be successful. What matters most is what you do day by day over the long haul. This, [...]

Knowledge is Power… so the saying goes. But if that is so, then academics would rule the world right? Let’s look at a wise saying from the bible: “He who gets wisdom loves his own soul. He who cherishes understanding prospers.” Proverbs 19:8 Knowledge itself is not power. It is the understanding that knowledge brings or [...]

It has never been easier to compare Malaysian company financials using our Investor Tool. Instead of painstakingly keying in data into Excel (which I used to do myself), just go to Investor Tool – at the bottom notice the Company Comparison box.

Q: So how do you double your money every 5 years? A: Earn a compound return of 15% every year. Don’t believe? OK say you have $1 now. Take out your calculator and go 1 x 1.15 – that gives you $1.15 – this is the amount you have at the end of the first [...]

ROCE is a good indicator was to how well a company’s management is using its business assets to generate earnings. ROCE = EBIT / Average Capital Employed where EBIT is the Earnings Before Interest and Tax Example: Petronas Dagangan Bhd PETDAG’s earnings for the year ending 31-Mar-07 were reported as follows: As per the above, [...]

ROE = Net Profit After Tax & Minority Interest / Average Shareholders Funds ROE is a popular measure of how efficient a company is using its funds to generate income for its shareholders. Unlike Return on Capital Employed, it does not take into account a company’s gearing position. For example, a company can increase its [...]

Capital Employed is also sometimes referred to as Funds Employed. It is basically the total of a company’s Business Assets (excluding its Cash holdings) less its Trade-related Liabilities. Capital Employed = Net Assets – Cash + Borrowings

Dividend Yield = Gross Dividend per Share / Share Price Dividends are usually periodic cash payments to shareholders out of a company’s earnings or earnings reserve. In corporate finance theory, the total returns you get from investing in a share = Income Return + Capital Return where Income Return is your dividend component, while Capital [...]

PEG Ratio stands for Price-Earnings to Growth Ratio. It is a ratio used to determine a stock’s value while taking into account earnings growth. The calculation is as follows: PEG Ratio = PER / Annual EPS Growth PEG is a widely used indicator of a stock’s potential value. It is favored by many over the [...]

EBIT Multiple = Enterprise Value / EBIT (EBIT stands for Earnings Before Interest and Tax. It is the profits of the company before the impact of interest income, interest expense and tax expense. As such it is an indicator of the earnings of a business excluding the impact of its cash holdings and borrowings). Calculation of [...]