Ratios

Question 1

PEG Ratio?

Answer 1

PE Ratio / Annual EPS Growth (higher than one - over valued)

Question 2

Dividend yield?

Answer 2

Dividend per share / market price per share

Question 3

Dividend cover?

Answer 3

Earnings per share / dividends per share

Question 4

Current ratio?

Answer 4

Current assets / current liabillites

Question 5

Quick ratio?

Answer 5

Current assets - inventories / current liabillites (more conservative than the current ratio)

Question 6

Earnings per share (EPS)

Answer 6

Net profit / Number of ordinary shares

Question 7

Price to Earnings Ration (P/E)

Answer 7

Market value per share / Earnings per share

Question 8

Sharpe

Answer 8

Portfolio return - risk free rate / standard deviation of the portfolio’s excess return

Question 9

EBIT

Answer 9

Earnings before interest and tax

Question 10

Capital Employed

Answer 10

Total assets - current liabilities

Question 11

Return on capital employed (ROCE)

Answer 11

Operating income (EBIT) / Capital employed

Question 12

Price-to-book Ratio (P/B)

Answer 12

Stock price / (Total assets - liabilities)