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Ratio Analysis

Earnings per share

Earnings per share 

Earnings per share is share of net income, after deducting preferred dividend, which is allocable to common shareholders.                                                                                  More >>>>>

Times Interest earned ratio

Times Interest earned Ratio

Times Interest earned ratio is used to measure the ability of a company to pay its Interest expense based on its EBIT.                                                                                       More >>>>

Bonds

Current Yield of a bond                                Current Yield of a bond is the interest income earned by an investor when purchased and held for a period of one year.                  More  >>>>>

Price of a Zero coupon bond                              A bond that does not pay periodic interest and pays a lumpsum amount at maturity is known as a Zero coupon bond.                        More >>>>> 

Capital Structure

Value of preferred stock                                  Value of Preferred stock is calculated by dividing the Dividend per share by the Cost of preferred stock.                             More >>>>>

Gordon’s growth model                              Gordon’s model of calculation of price of a share is based on the Dividend relevance Theory.                                           More >>>>> 

Dividends 

Dividend Yield                                              Dividend Yield is the percentage of return / earnings  generated from an investment in a stock.                                            More >>>>>

Dividend Payout ratio                            Dividend payout ratio is a ratio that gives the proportion of net income that is paid to shareholders as dividend payment.  More >>>>>