Evaluating Flashcards
Cash Flow per Share
Not clear
Current Ratio
Current Assets / Current liabilities:
Will they be able to pay off coming expenses or will they go in debt, need loans, or go bankrupt?
Current Assets: Cash, inventory, etc
Current Liabilities: Owed within a year
Want: At lest 2:1
Dividend Yield
Other then looking for a dividend, why is this different then looking at the stock price itself?
EPS
Earnings Per Share:
How much a company earned / how many outstanding shares they have.
Net Profit Margin
Money left over after paying expenses / amount earned.
Basically how much bang for their buck the company gets.
Want: High percentage
Price / Book
Price of stock / price of liquidated stock
If the company sold all of its assets, would they have enough money per share to pay you back?
Want: Below 1
P / E
Price / Earnings:
How much did the company earn with your stock compared to how much you payed? Did the company usefully use what you gave them to create earnings?
Want: Low
P / S or PSR
Price / Sales per share:
Did the company usefully use what you gave them to create sales?
P / CF
Price / Cash-flow:
Did the company usefully use what you gave them to create cash flow? Cash flow is whats left over after paying expenses. “Free” cash-flow refers to the cash left after expenses and paying capital assets (land, buildings, machines, equipment, etc).
ROE
Return on Equity:
Net income / total shareholder equity
Did the company usefully use what you gave them to create profits?
Want: Bigger (anything above 20% is good)
SMA
Simple Moving Average: A moving average of the stock price.
MACD
Moving Average Convergence Divergence:
Relative Strength Index
How “rubber banded” a stock is either overbounded or underbounded.
Want: 30 and below shows it being underbought and will bounce up. If above 70, likely overbought and will pullback.
Relative Price Strength
How “well” the stock is in comparison (what is the standard for “well?”)
Volume
How much stock trading is happening
