Cover image for Magic numbers for stock investors : how to calculate the 25 key ratios for investing success
Title:
Magic numbers for stock investors : how to calculate the 25 key ratios for investing success
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ISBN:
9780470821244

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30000010070018 HF5681.R25 T45 2004 Open Access Book Advance Management
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Summary

Summary

A quick and accurate way to calculate key investment ratios
Written by a leading finance expert, this book offers readers simple explanations on how to calculate and interpret key financial ratios-information that is essential for the accurate assessment of a company's financial condition and the true value of its shares. This comprehensive resource is packed with numerous examples from actual company reports and features a supporting Web site at www.magicnumbersbook.com. Readers will also find many online reference sources, including company Web sites and free software offers.
Peter Temple is a graduate in economics and statistics from the University of Wales, and is a Fellow of the UK Securities Institute. After an 18-year career as an investment analyst in fund management and investment banking, Temple turned to full-time writing in 1988 as a freelance financial journalist and author.


Author Notes

Peter Temple has spent 33 years working in or writing about financial markets. After an 18-year career in fund management and stockbroking, he became a full-time writer in 1988. He has written more than a dozen books about finance and investing, mainly aimed at private investors. His articles appear widely in the financial press. He and his wife live in part of a converted water mill in the English Lake District.


Table of Contents

Foreword
Introduction
Part 1 Valuation "Magic Numbers".
1 Price to Sales Ratio
2 Price to Book Value
3 Enterprise Value to Sales
4 EV/EBITDA
5 Peg Factor
6 Price to Research Ratio
7 Reinvested Return on Equity
Part 2 Income Statement "Magic Numbers".
8 Sales, Earnings, and Equity Per Share
9 Sales, Earnings, and Equity-per-share Ratios
10 Staff Costs as a Percentage of Sales
11 Directors? Remuneration as a Percentage of Net Income
12 Sales and Profit Per Employee
13 "Pro-Forma" Earnings
14 Margins
Part 3 Cash Flow Statement "Magic Numbers"
15 Operating Cash Flow/Operating Profit
16 Price to Free-cash-flow Ratio
17 Free Cash Flow (FCF) to Sales
18 Return on Invested Capital
19 Discounted Cash Flow
Part 4 Balance Sheet "Magic Numbers" .
20 Current Ratio and "Acid Test"
21 Debtors Days and Creditor Days
22 Stock Days and Stockturn
23 Gearing
24 Return on Capital Employed
25a Z-Score Components
25b The Z-Score
Appendix: Finding the Information
Index.