Learning to read a balance sheet (MANAGEMENT 11)

Total Assets

reflects anything owned or controlled by a business

Any ratio we have can be calculated using

both sides of the balance sheet

What does capital employed represent?

Long term funding base of a company, excludes short term liabilities

What is capital employed used to asses? 

The sufficiency of profits to maintain foundational company funds 

What does networth reflect

shareholder’s equity

What does working capital measure

Day to day operating liquidity available to the business

Nominal value

An arbitrary value assigned to shares, used to calculate issued common stock

Market value

Price quoted on the stock exchange

For EPS what is more important than what

Growth overtime than absolute

What does divided conver indicate 

How many times dividends are covered by earnings 

What does pay out ratio indicate

shows the percents of earnings paid as dividends

What does the earnings yield show

Rate of return from earnings

What does the PE ratio show

How many years it would take to earn back price through earnings