Week 11
Financial statement Analysis
Price earnings (PE) ratio
• Volume is the number of shares traded in a day.
• Value is the value of all shares traded in a day.
• The price of the share can change substantially in a day.
• The HEPS only changes once a year.
Just looking a little bit deeper at the numerator in the price-earnings ratio, we said it’s your
price over your headline earnings per share,
The market value is the value of all shares trading that day.
This share price changes on a daily.
It’s determined by the interaction of demand and supply
Return on shareholder investment
Includes both forms of return for shareholders:
1. Dividends
2. Share price appreciation
ROSI =
[ ( P1−P0 ) + D ] × 100
P0
ROSI = Return on shareholder investment.
P1 = Market price of the share at the end of the year.
P0 = Market price of the share at the beginning of the year.
D = Dividends per share (declared during the year).
Financial statement Analysis
Price earnings (PE) ratio
• Volume is the number of shares traded in a day.
• Value is the value of all shares traded in a day.
• The price of the share can change substantially in a day.
• The HEPS only changes once a year.
Just looking a little bit deeper at the numerator in the price-earnings ratio, we said it’s your
price over your headline earnings per share,
The market value is the value of all shares trading that day.
This share price changes on a daily.
It’s determined by the interaction of demand and supply
Return on shareholder investment
Includes both forms of return for shareholders:
1. Dividends
2. Share price appreciation
ROSI =
[ ( P1−P0 ) + D ] × 100
P0
ROSI = Return on shareholder investment.
P1 = Market price of the share at the end of the year.
P0 = Market price of the share at the beginning of the year.
D = Dividends per share (declared during the year).
