Please provide a basic list of parameters (ratios and the "incalculables") that one should check before...

Please provide a basic list of parameters (ratios and the "incalculables") that one should check before buying the shares of a company.

Solutions

Expert Solution

There are various key financial ratios that should be checked before buying the shares of a particular company.

The dividend yield is an important ratio which depicts the amount of income that investors would receive for each dollar invested. The price earnings ratio is another important ratio which compares the price that investors are willing to pay for each dollar worth of earnings. High price earnings ratio indicates that the market expects the future earnings to grow much faster. The gearing ratio should also be considered which reflects the extent to which a company is burdened with debt. Profitability ratios such as gross margin also be considered to judge the amount of profits that the company is making. Earning per share is the key ratio which shows the profit that the company has made per share. Liquidity ratios such as current ratio and quick ratio are also useful in understanding the extent to which the company can cover it short term liabilities

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Create a check list decision tree identifying 20 or more questions that should be asked before...

Create a check list decision tree identifying 20 or more questions that should be asked before terminating the employment relationship. check list should incorporate the concept of employment at will Express and implied contract retaliation just cause due process progressive discipline state law disparate impact discrimination disparate treatment discriminates and similarly situated standard Waiver under the ADEA

FINANCIAL MARKETS SHOULD PROVIDE THE CAPACITY TO AVOIDING RISK. THEREFORE, ONE OF THE BASIC FUNCTION FOR...

FINANCIAL MARKETS SHOULD PROVIDE THE CAPACITY TO AVOIDING RISK. THEREFORE, ONE OF THE BASIC FUNCTION FOR FINANCIAL MARKET IS RISK AVOIDING FUNCTION. -Explain the function and explain the state of function in USA?

Please check it out within 30 minutes. Please provide explanation or working so I can check...

Please check it out within 30 minutes. Please provide explanation or working so I can check with my answer. Question: In a study of the system, Cl2(g) + Br2(g) 2BrCl(g), several different reaction mixtures were prepared, placed in a 15.00 × 10–3 m3 container, and allowed to reach equilibrium at 350 K. Despite having different starting compositions, three of the four mixtures had an identical composition at equilibrium. Which one of the systems has a different equilibrium composition than the...

List the four common parameters that affect the optimisation of a pumping system. PLEASE PRINT THE...

List the four common parameters that affect the optimisation of a pumping system. PLEASE PRINT THE SOLUTION IN NEAT SCRIPT

How should a medical Administrator check in a patient , provide steps and procedures and Hippa...

How should a medical Administrator check in a patient , provide steps and procedures and Hippa act ?

Please check my work. The purpose of this exercise is to provide students with the opportunity...

Please check my work. The purpose of this exercise is to provide students with the opportunity to normalize data. Assignment: Identify what fields from the list below belong to which table. If you are uncertain, place the field under the column with your argument on why it should belong. Write your answers in the columns below the table names. COURSE FACULTY LOCATION SECTION STUDENT CourseID CourseNumber CourseName CreditHours Status Description Days StartTime EndTime FacultyID Status FirstName LastName WorkPhone HomePhone CellPhone...

True or False: -Before performing Regression, you should check that your data is normally distributed. -If...

True or False: -Before performing Regression, you should check that your data is normally distributed. -If the data (and the residuals) are normally distributed, the residuals scatterplot will show the majority of residuals at the center of the plot for each value of the predicted score, with some residuals trailing off symmetrically from the center. -You can test for linearity between an Independent Variable and the Dependent Variable by looking at a bivariate scatterplot. -You can check homoscedasticity by looking...

Question