Equity Ratios Flashcards
What is Basic Earnings per Share?
The amount of a company’s profit that can be allocated to one share of its stock.
Do you want the Basic Earnings/Share to be high or low?
High
What is Price/Earnings?
A company’s current share price relative to its per-share-earning.
Indicates the dollar amount an investor can expect to invest in a company in order to receive one dollar of the company’s earnings.
Do you want a high or low Price/Earnings?
High
The exception is for companies that are in their growth phase.
What is Dividend Payout?
The total amount of dividends paid out to shareholders relative to the net income of the company.
The amount that is not paid out is used to pay off debts or reinvest.
Do you want Dividend Payout to be high or low?
High
The exception is for companies that are in their growth phase.
What is Dividend Yield?
How much a company pays out in dividends each year relative to its share price.
Do you want Dividend Yield to be high or low?
High
The exception is for companies that are in their growth phase.
What is Net Free Cash Flow?
Cash generated from operating activities that would be available to common shareholders.
Helpful to investors to evaluate how likely a company is to pay their expected dividends or interest.
Do you want Net Free Cash Flow to be high or low?
High
