Stock Market Investment Ratio Analysis & Example

Following are List of investment ratios and formulas:

1) Bonus covers = Profit after tax / Bonous

2) Bonus yield = (Bonus per share/ Market price per shares) * 100 %

3) Earnings per share (EPS) = Profit available to equity shareholders / Number of equity shares

4) Price-earnings-ratio (P/E) = Market price per share / Earnings per share

5) Price to sales ratio = Market price per share / Sales per share

6) Price earnings growth (PEG) ratio = Price per earnings / Yearly EPS growth

7) Price to book value (PBV) = Market price per share / Balance sheet price per share

8) Payment Ratio = Bonus per share / EPS

Examples:

1) Trifid Research P. Ltd. made a net benefit of $80,000 that is available to normal shareholders, and the bonus declared is $20,000, then:

   A Bonus cover =  80,000 / 20,000 = 4 times

2) An investor bought a share at $6.00 and he received a bonus of $0.30 on it, then:

    Bonus yield = (0.30 / 6.00) * 100 % =  5 %

3) Company ABC has a yearly earning of $140,000 dollars. Total Bonus of $70,000 is to be paid out, and the company has 350,000 excellent shares.

Solution:

Earnings per share = $140,000 / 350,000 = $0.40

Bonus per share = 70,000 / 350,000 = $0.20

The Bonus payout ratio = 0.20 / 0.40 = 50%

4) Trifid Research P. Ltd. has normal share assets of 200,000 shares at $1 each. It made a net profit of $400,000 that is available to the normal shareholders. The market price of a share is $6.00.Then:

EPS = $400,000 / 200,000 = $2 per share

P/E ratio = $6 / $2 = 3

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