Company financial statements

Company financial statements

1. P/E ratio

   • lower is cheaper

2. ROCE

   • earnings compared to capital employed
     • total assets less current liabilities
     • shareholders funds (capital and reserves) plus long-term creditors
   • profit before interest and tax / capital employed x 100
   • comparison between companies

3. ROE

   • earnings compared to equity invested
   • earnings compared to equity invested
   • net profit after tax and pref divs / capital and reserves (shareholders funds) x 100
   • comparison between bonds and deposits

4. dividend cover

5. dividend yield

6. operating profit margin

   • operating profit / revenue x 100
     • exclude effects of investments, financing and tax

7. working capital ratio

   • current assets / current liabilities