What is Price to Earning?
The price to earning ratio measures the share’s current value relative to the earnings per share. It helps in indicating the accuracy of value as a high PE means the stock is overvalued while lower is undervalued.
Formula = Share price / earnings per share
Why no WACC.
WHY NO - VALUE CREATED-ROCE-WACC÷ROCE
Why no WACC.
WHY NO - VALUE CREATED-ROCE-WACC÷ROCE
What is Price to Sales?
The price to sales ratio is used to measure the market valuation for every sale made. It helps to indicate whether the stock is under or over-valued. The lower the ratio the more attractive it becomes to the investors as it means, the stock value it low compared to its increase in sales.
Formula = Market Capitalization/ Sales (Revenue)
What is Price to cashflow from operating?
It measures the amount of cash generated by operating relative to its stock price. The higher the cashflow generated the more attractive it becomes as it means the company have liquidity and able to generate cash to compensate for its operating expenses.
Formula = Stock price / CFO
What is Price to book value?
It measures the relation between the stock price relative to the book value of the company. As such, it indicates whether the stock is undervalued or overvalued compared to its book value (Assets- Liabilities).
Formula = Stock Price / Book value
What is Price by earning to growth?
It measures the share value relative to its earnings while adding the growth rate to help draw a bigger picture of how the share is expected to perform in the future. The higher the growth rate the more attractive the share becomes as it means the value is increasing.
Formula = (Price / EPS)/ (EPS Growth rate)
What is Earnings yield?
It shows the dividends for a year relative to the current price and market value of the share. This is an indicator to estimate whether the price of the share is under or overvalued.
Formula = EPS for 12 months/ Share price
What is Solvency ratio?
It measures the company’s ability to meet its obligations using its assets.
Formula = Operating income after tax / current liabilities.
What is Equity to asset ratio?
It measures the amount of equity the company has relative to its assets
What is Return on invested capital?
It measures the amount of return a company generates by investing its capital.
What is Return on equity?
It indicates the profitability of a firm relative to its shareholder’s equity. The higher the better as it shows the company is allocating its capital efficiently.
Formula = Net income/ shareholder’s equity
What is Return on capital employed?
It indicates the profitability and efficiency of a company on how it utilizes its capital to generate profit.
Formula = EBIT/ Capital employed
What is Interest Spread?
It is the difference between the interest rate paid to depositors of a bank and the interest rate paid by loaners by the bank It measures the ability of a bank to generates profit using interest rates.
What is Investment Yield?
It shows the earnings generated by in investments in a period of year.
What is Net Interest Margin Ratio?
It measures the net interest generated by credits issued compared to interest collected by loaners.
What is Provisions Coverage (%)?
The percentage of base assets that a company needs to pay for using its own funds. It measures the company’s ability to meet its obligations.
What is Cash to Debt Ratio?
It indicates the amount of time needed by a company to pay all of its debts. Its measured using the cash flow from operating to the debts and obligations.
What is CFO to Debt?
It indicates the amount of time needed by a company to pay all of its debts. Its measured using the cash flow from operating to the debts and obligations.
What is Dividend Cover?
It measures the number of times a company is able to pay dividends to its shareholders.
Formula = Earnings per share / Dividends per share
What is Dividend Payout?
It is the percentage of income pay out as dividends to shareholders.
Formula = Dividends / Net income
What is Retention Ratio?
It is the return of the net income used to grow the businesses
Formula = retained earnings / net income
What is Asset Turnover (Turnover ratio)?
It shows how efficient the company is utilizing its assets to generate revenue and sales. It measures the value of company’s sales relative to its assets.
Formula = total sales / beginning assets + ending assets
What is Cash Turnover (Turnover ratio)?
It measures how many times a company efficiently uses its cash to generates revenue
Formula = Revenues/ Cash and cash equivalent
What is Days in Working Capital?
It measures the number of days a company is able to generate revenue using its working capital. The higher the days indicates the less efficient a company is using its capital.
Formula = working capital / revenue
What is Fixed Asset Turnover?
It measures how much a company is able to generate cash using its fixed assets efficiently.
Formula = Net Sales / Fixed assets
What is Operating Cashflow to Revenue?
It indicates the ability of accompany to turn its sales into cash using the cash flow from operating.
What is Assets to Shareholder Equity?
It shows how many assets are generated by using the shareholder’s equity rather than using debt. It indicates the profitability of a company
Formula = Total shareholder’s equity / total assets
What is Capitalization Ratio?
It measures the percentage of debt a company has in its capital structure. The higher the debts the risker the company become.
Formula = Total debts / shareholder’s equity
What is Debt to Assets (Solvency ratio)?
It measures the amount of assets financed using debts. It is an indicator of leverage, as such, the higher the debt to more change the company might default.
Formula = total liabilities/ total assets
What is Long Term Debt to Equity (Net Worth)?
It measures the percentage of debt to equity used in the capital structure of a company. It shows the ability of a company to pay for its long-term debts using its own equity.
Formula long term debt / book value
What is Weight of Debt (WACC Calculation)?
The percentage of debt a company has in its capital structure.
Formula = Weight of debt * cost of debt
What is Weight of Equity (WACC Calculation)?
The percentage of equity included in a company’s capital structure.
Formula = weight of equity * cost of Equity
What is Cash Ratio?
The ability of a company to meet its current obligations using its current assets after deducting inventory as it is considered as less liquid asset.
Formula = current assets – inventory / current liabilities.
What is Current Ratio?
The ability of a company to meet its current obligations using its current assets.
Formula = current assets / current liabilities
What is Net Margin?
It measures the percentage of income (Profit) generated from revenue
Formula = revenue – cost / revenue
What is Operating Margin?
The amount of profit generated after paying all the operating costs that are not tax or interest expense
Formula = Operating income / revenue
What is Cash Flow Return on Assets?
It measures the amount of earnings generated compared to value of an asset.
Formula = Cashflow from operating / total assets
What is Interest Coverage?
The company’s ability to cover its interest expenses using its own equity. It measures the company’s ability to meet its obligations.
Formula = EBITDA / interest expenses
What is Return on Assets?
It indicates the profitability of a company relative to its total assets.
Formula = Net income / total assets
What is Gross Non-Performing Asset Ratio NNPA Net Non-Performing Assets?
The measure of the number of bad debts a bank has. As such, it indicates the healthiness of a bank as per receiving its interests from loans.
What is Net Interest Margin Ratio?
It measures the difference between the interest earned on their assets and the interest paid to the lenders.
What is Net Non-Performing Asset Ratio?
The measure of the amount of bad debt a bank has after using a provision to coverup for a percentage of the bad debt.
What is Current and Savings Account Amount?
Current accounts are the accounts where individuals use regularly to deposit and withdraw.
Saving accounts are accounts where individuals use to save money, the interests for these accounts are high compared to the current accounts.
What is Current and Savings Account Ratio?
The ratio of deposits to current and saving accounts in a bank. It indicates the total amount of deposits as the higher ratio indicates the higher portion of deposits in on the current and saving account.
What is Tier-1 Ratio (Basel II) (%)?
Measures the healthiness of a bank through examining its core capital that is mostly consist of shareholder’s equity. As such the higher the amount existing in the core capital the healthier a bank and is considered as less risky. The ratio is calculated by dividing tier 1 by the total bank capital.
What is Tier-2 Ratio (Basel II) (%)?
it is the supplementary capital of a bank. It consists of less liquid capital as such, it is considered as less reliable.
What is Gross Non-Performing Assets?
The amount of bad debts the bank has. Meaning, it is the remaining amount of interest remaining unpaid by borrowers from the bank.
What is Provisions Coverage (%)?
The amount of provisions (reserved percentage of the bank’s profit) a bank uses to coverup for bad debts (non-performance assets).
What is Capital Adequacy Ratio?
The amount of reserves a bank holds as an insurance to pay for debts when it falls short on paying the debts. It is measured by dividing the total capital (tier 1 and tier 2) by the risk weight of assets.
As such, it indicates the amount needed to keep up as reserves based on the risk of default each asset has.
What is Advance Yield?
The sum of all interests and income generated during a year divided by the average of investments during the year. It indicates the ability of a bank to generate profit from loans.
What is Cost to Income?
It measures the cost used to generate income. As such, it measures the bank’s ability to generate profit by lowering its cost to income.
What is Assets to Shareholder Equity?
It indicates the ratio between the company’s assets to amount of assets shareholders have on the company.
What is Capitalization Ratio?
It measures the percentage of debts on the company’s structure.
What is Debt to Assets?
It measures the percentage of debt a company uses to finance its assets.
What is Debt To Capital?
It measures the percentage of debt a company uses in its capital structure.
What is Long Term Debt to EBIDTA?
It measures the company’s ability to cover its long term debt before it covers its interest, tax, amortization and depreciation.
What is IBT Margin?
It measures the percentage of profit a company generates from its sales before it pays its tax obligations.
What is Net Margin?
It measures the percentage of profit a company generates from its revenue.
What is Operating Margin Before Contingencies?
It measures the company’s revenue from operation before it pays for its obligations
What is Cash Flow Return on Assets?
It measures the company’s ability to generate cash flow using its assets.
What is Interest Coverage?
It measures the company’s ability to use its assets to cover its interest obligations.
What is EV to Assets?
It measures the company’s whole value to its amount of assets
What is EV to CFO?
It measures the company’s total value relative to its cash flow from operation.
What is EV to Earnings?
It measures the company’s value compared to its earnings.
What is Enterprise Value to EBITDA?
It measures the company’s total value relative to its Earnings before interest, tax, amortization, and depreciation expenses.
What is Enterprise Value to EBIT?
It measures the company’s value related to its earnings before interest and taxes
What is Enterprise Value to Sales?
It measures the company’s value relative to its sales
What is Return on Assets?
It measures the company ability to generate profit using its assets.
What is Operating Margin?
It measures the percentage of profit a company generates from its sales.