Fundamental Analysis Equations

Book Value per Share

Tangible assets - liabilities - par value of preferred stock
shares of common stock

EPS - Earnings per share

Earnings available to common
number of shares outstanding

Current Yield: what is the ratio; what else is it called

Ratio: annual dividends per common share
market value per common share
AKA: Dividend Yield

dividend payout ratio

annual dividends per common share
EPS

P/E ratio

current market price of common share
EPS

Current Ratio

current assets
current liabilities

Acid-Test Ratio
(what’s the ratio, what else is it called)

Also called: Quick asset ratio
Equation: Current assets - inventory
current liabilities

Debt to Equity

Long term debt
total capitalization (stock, capital surplus, retained earnings)

Working Capital

Current assets - current liabilities

Growth vs. Value investment analysis

Growth: high P/E, popular investments for high pricing, little to no dividends
Value: low P/E, undervalued companies, reasonable dividend yields

markup calculation

commissions + spread (price - inside bid or ask)
total investment cost

Net Worth equation

Total Assets - Total Liabilities