Financial Markets For The Rest Of Us An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds |
Page 227 departments are all considered overhead with no direct involvement in production. This figure shows a company's effectiveness in controlling its overhead costs. The higher this value the better.Per Share Data Book Value - Also known as shareholder's equity, this is the total asset value of the company less its liabilities divided by the number of shares. In simple terms, this value represents how much each share of the company is actually worth if the company were to be liquidated today and all of its debt paid off. For a company with no earnings that just went public, the book value is almost equal to the stock's IPO price minus the liabilities per each share. Book value is sometimes used as a gauge for a stock's price. For example, investors may question a $100 stock with a book value of $5. Earnings Per Share - Also referred to as EPS, this is a company's annual earnings divided by the number of its shares. This value basically indicates whether a company is earning its keep. Frequently a company's earnings are expressed in this format. The EPS indicates how much profit the company is making per each share. Most forecasts (annual or quarterly) are also published in this format. A company having consistently higher EPS year after year is obviously considered a good investment. Quarterly EPS figures are sometimes compared to those of the equivalent quarters in the past years to get an indication of the company's quarterly performance. Consecutive quarters are also compared at times to determine the company's quarter over quarter performance; however, this is a less accurate measurement, as some companies have seasonal cycles yielding an inconclusive quarter over … |
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