Fundamental analysis is crucial subject, especially for long term investor.
In order to reduce my investment risk, I need to catch up this subject as soon as possible
Key points to Fundamental Analysis:
A. Earnings Per Share (EPS)
The Formula for calculating net EPS is:
B. Price - Earnings Ratio (PE ratio)
The formula for PE ratio is:
Current market price divided by earnings per share
C. Dividend Yield
The formula for Dividend Yieldis:
Dividend per share divided by Market price per share
D. Book Value Per Share
The formula is:
Total Shareholders' fund divided by number of shares outstanding
E. Net Return on Equity (ROE)
The formula is:
Net profit divided by total shareholders' funds
F. Return on Assets (ROA) & Return on Capital Employed (ROCE)
The formula is:
Net profit divided by total assets
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