P/E ratio

The Buffett Approach to Valuing Stocks Focusing on return on capital may be the key to investment success. By Steven R. Ferraro, CFA, PhD 2009 Volume 12 Issue 3 Much has been written about famed U.S. investor and Berkshire Hathaway CEO Warren Buffett’s investment style and successes. Preeminent among these writings are the oft-cited Berkshire Hathaway shareholder letters, written by the “Oracle of Omaha” himself. These informative letters have been the basis for a multitude of books. But even

for the First Group Plc, a leading land transport corporation, so as to determine whether or not the client should invest in the company. For this purpose, some ratios of FirstGroup Plc were reviewed for a 5 year period and compared against its competitors: Stagecoach Group Plc and the Go-ahead Group Plc. In some relevant places, the ratios were also compared with the industry benchmark. However, certain data for 2014 are not available so that up to 2013 statistics were reviewed in that situation.

with Fumaderm in June 2006. Looking at financial ratios can help you determine the effectiveness of your business operations. The main areas/ratio that I have focussed on and which I guess are important for apprehending the current situation of a company is listed below: Current Ratio 1.93 Earnings per share 6.74 P/E Ratio 33.91 Book value per share 33.24 Market Capitalization 53.52 Return on assets 16.18 Current ratio: This is the ratio of Total Current Assets for the most recent interim

Earnings per share (also called net income per share) is a ratio that measures net income earned per share of stock outstanding, and is the money each share of stock would receive if all of the profits were distributed to the outstanding shares at year end. The higher the EPS, the better the business is as an investment from a shareholders perspective. EPS could be due to an increase in profit or a decrease in the number of shares in issue, which causes the return for each share to be higher. Application:

very confusing for investors. The five year expected PEG ratio for Google according to Yahoo Finance (2012) is 0.80. High risk companies will trade at lower PEG ratios than lower risk companies. Price to book ratio tells an investor how much he or she is paying for one dollar of net assets, with net assets equal to total assets minus total liabilities. According to the key statistics data provided by Yahoo Finance (2012), the Price/Book ratio is 3.44. Book value per share is the proceeds per share

I recommend to the board to buy a stock in Boeing. Boeing is a well-established aerospace manufacturing company with a high dividend yield. It had made substantial positive gains. Some of Boeing’s strengths include strong market position, increase in global aerospace and defense spending, increase in passenger travel, decreased expenses, and increased operational performance. I believe our company will benefit from Boeings high dividend yield and receive positive gains. Aerospace manufacturing

The P/E ratio is calculated by share price divided by earnings per share or market capitalization divided by earnings. It is a relative indicator of potential growth in profits. The P/E ratio of Thorntons PLC is calculated below. | |2011 £’m |2010£’m |2009£’m |2008£’m |2007£’m

based on a variety of components. Hhgregg is offering some revolutionary initiatives that will help the company grow, as well as expanding their brand to help them build and gain a larger portion of the market. Also, after looking at two key financial ratios and comparing them to the industry average, I have determined hhgregg is in a solid financial position and has a high return on investment to its shareholders. Overall, hhgregg is an excellent company to invest in based on projected future earnings

performance calculation. The following graph plots the historical P/E ratio (the dark blue line) in conjunction with 10-year Treasury note interest. Notice that the current P/E ratio on this quality company is as low as it has been since 1998. A further indication of valuation can be seen by examining a company's current price-to-sales ratio relative to its historical price-to-sales ratio. The current price-to-sales ratio for Apple is 4.30, which is historically normal. Looking to

The ROE for the company is: |   ROE | = |   Net income / Equity | ROE | = |   $13,559 / $64,200 | ROE | = |   0.2112 or 21.12% | The computation of the plowback ratio: | b = 1 – 0.42 | b = 0.58 | The sustainable growth rate is: | Sustainable growth rate | = |   [(ROE)(b)] / [1 – (ROE)(b)] | Sustainable growth rate | = |   [(0.2112)(0.58)] / [1 – (0.2112)(0.58)] | Sustainable growth rate | = |   0