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Friday, 6 January 2012

Financial ratio Analysis:Per share Ratios

Financial ratio Analysis
 
1.Per share Ratios: Per share Ratios includes 

1.Earn Per Share(EPS): we already discussed about this in How to read the report card of a company article.

2.Dividend Per Share(DPS):DPS is the total dividends paid out over an entire year(including interim dividends but not including special dividends) divided by the number of out standing ordinary shares issued.

                                                     DPS=D-SD/S
                          
D= Tota dividends paid out over an year
SD=Special Dividends
S=Shares outstanding for the period.

3.Book Value per share(BVPS): Book Value Per Share shows the accounting value of a company against the market value.
For growth stocks or in times of bullish runs in the market, the market values(stock prices) of companies tend to be higher than the book value.
In a bear market, The market value tends towards the book value
For companies where the market value is below the book value it is potential sign of undervaluation.

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