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Financial analysis

Coefficient analysis
Liquidity indicators (Liquidity Ratios)
Debt Management Indicators (Debt ratios)
Profitability indicators (Profitability ratios)
Efficiency indicators (Asset management ratios)
Indicators of market activity (Market value ratios)

Indicators of market activity (Market value ratios)


Indicators of market activity (Market value ratios)

In spite of the fact that market activity indicators are considered only for the annual period, all indicators are scaled for the periods of the month and quarter - cumulatively. The last month of the quarter corresponds to the value of the quarterly coefficient, respectively, the last month of the year - to the annual coefficient.

The average weighted average annual average number of ordinary shares in circulation during the reporting period is determined by summing up the number of ordinary shares in circulation on the first day of each calendar month of the reporting period and dividing the amount received by the number of calendar months in the reporting period.


Example.

☛ 01.01.2000 – 1000 shares outstanding.
☞ 01.04.2000 – 800 shares were issued.
☞ 01.10.2000 – 500 shares were bought out.

Calculation of the weighted average number of shares:
Period 1 2 3 4 5 6 7 8 9 10 11 12
Changes 1000 - - 800 - - - - - -500 - -
Number of shares 1000 1000 1000 1800 1800 1800 1800 1800 1800 1300 1300 1300
Weighted average 1000 1000 1000 1200 1320 1400 1457 1500 1533 1510 1491 1475

    Example of calculating the weighted average number of shares:.

    Weighted average number of shares (for 5 months) = Total for 5 months / 5 = 6600/5 = 1,320 shares.
    Weighted average number of shares (per year) = Total for 12 months / 12 = 17,700 / 12 = 1,475 shares.


  1. Earnings per share - EPS
  2. Earnings per share is one of the most important indicators affecting the company's market value. Calculated by dividing the net profit or loss for the reporting period (in monetary units) by the number of ordinary shares in circulation:

      EPS = (Net profit - Preferred dividends) / Average annual number of ordinary shares



  3. The dividend coverage ratio is ODS (Ordinary dividends coverage), times
  4. The dividend coverage ratio - it demonstrates the company's ability to pay dividends out of profits. Shows how many times dividends can be paid out of net profit. Calculated by the formula:

      ODS = (Net profit - Preferred dividends) / Dividends on ordinary shares.



  5. The ratio of the value of shares to net profit – P/E (Price to earnings ratio)
  6. This ratio is calculated as the ratio of market capitalization (share price) multiplied by the number of issued ordinary shares - to the profit received. A high P / E ratio usually indicates a stable profitability with the expectation of growth in the future. Usually, a high P / E level is considered to be a value of 15 or higher.

      P / E = (Share price * Issued shares) / Net profit




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