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 [...]
PE Ratio = Share Price / Earnings Per Share Where Earnings per share (EPS) is a company’s Net Profit After Tax and Outside Equity Interest, divided by the Weighted Average Equivalent Number of Shares issued. For example if a company makes a net profit after tax of RM10 million and it has 100 million issued [...]
NTA = (Shareholders Funds – Intangible Assets) / No of Issued Shares This is a quick and useful way to get a feel for a company’s value. For example, if a company’s NTA is RM1.50 and its share price is RM3.00, it implies a company’s share price is trading at twice its tangible book value. [...]
EV = Market Cap + Net Borrowings It is a measure of the value of a company’s businesses excluding the cash holdings and financial debt of the company. If a company has more cash than borrowings, then its EV will be Market Cap less the net cash position. Why Do We Have to Look at [...]
Market Capitization or Market Cap = Number of Issued Shares x Latest Share Price For example if a company has 100 million shares and its share price is RM5, its market cap is RM500 million. In theory the stock market is placing a value of RM500 million for that whole company. Note: Appraising a company’s [...]
