More On Balance Sheets

More On Balance Sheets

More on Balance Sheets

Some of these facts to be elicited are summarised, and the relevant figures already calculated for you, and published in the financial Press. These facts fall into two groups:

(a) The Statistical Determinants of Share Status. These are the factors, expressible in actual figures, determining the investment standing of shares. Examples are:

Gross dividend per cent.

Times covered.

Gross dividend yield per cent.

Earnings yield per cent.

Market price/Earnings ratio (PIE).

Equity asset value.

(F,) The Non-statistical (or qualitative) Determinants of Share Status. These are factors determining the investment standing of shares, which are not expressible in figures. Examples are:

Type of industry and whether expanding, opportunities for growth, at home or abroad.

If expanding, whether in the same field or by diversification.

Management efficiency and policy.

Demand for the company's products.

Merger or take over possibilities.

Competitive strength of rivals.

It is not, of course, intended that you should inspect every balance sheet in detail and assess all the information contained. You will not be likely to have the time to do this, and even if you did attempt it the result would be to Thid yourself enmeshed in a huge web of unnecessary particulars.

More to the purpose, thesewebpages will acquaint you with the technical terms and principles by means of which you will readily grasp the analyses already provided for you, the digests of companies' reports and the relevant comments in the financial press.

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Internal pages of interest onWorking Capital - Assets Side



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