Chapter ii basic analysis term 2. 1 eps (gains per share, earthings per share)
Definition and interpretation
The company earned a fair share of the money on each share。
Formula
Eps = net profit / gross equityPractical application scene
Eps growth is a hard indicator of corporate "better."。
But the eps can be diluted with new shares, so read together with roe。
Example of calculation
The company's annual net profits, 1 billion yuan, total equity, 500 million shares:
Eps = 1 billion / 500 million = 2. 0 yuan/unit2. 2 pe (surplus, price-to-earnings ratio)
Definition and interpretation
"how many years at current profit."。
Precious ruler whose equity is relatively profitable, a is the most commonly used valuation indicator。
Three calibres:
Static pe = current price / prior year eps (using last year's published data)
Scroll pe(ttm) = current / nearly 12 months eps (most commonly used)
Dynamic pe = current prices / forecast for this year's eps (including expectations, large fluctuations)
Formula
Pe = share price / epsPe percentage: current pe position in historical compartments。
20% = less time than 80% in history; 80% = more time than 80% in history。
Practical application scene
It's overrated and undervalued。
The wide-base index (e. G. 300) looks at pe; the loss unit pe is negative, invalid and is replaced by pb or ps。
Pe in different industries cannot be directly compared to: bank pe 5-8 times longer, technology unit 30-50 times more normal, with different industry attributes。
Example of calculation
A share price of $40, rolling eps 2:
Pe(ttm) = 40 / 2 = 20 times
Meaning: 20 years return based on current profitability (no growth considered). If the historical pe area is 15-30 times, the current 20 times is slightly lower。
Valuable application (key) base month investment of $1,000:
Pe percentage 20% (cheap) cast more than 1000 (e. G. 1300)
Pe percentage 80% (excusable) cast less than 1000 (e. G. 700)
2. 3 pb (market net, price-to-book ratio)
Definition and interpretation
The stock price is cheap compared to "net assets in books"。
Suitable for heavy assets, cycles, financial industries (banks, properties, steel)。
Formula
Pb = share price / net assets per share (bvps)
bvps = net assets / total equityPractical application scene
Pb
Low book value for light assets companies (internet, services) and low reference value for pbs。
Example of calculation
Equities of $8, net assets per share of $10:
Pb = 8 / 10 = 0. 8 times (net)2. 4 roe (net asset rate of return, return on equity)
Definition and interpretation
The company earns what each dollar that shareholders invest。
One of buffet's most important indicators is measuring earning power。
Formula
Roe = net profit / net asset x 100%The dupont three factor dismantling:
Roe = net interest rate x total asset turnover rate x equity multiplier
(profitability) (operational efficiency) (financial leverage)Practical application scene
Long-term roe > 15% is usually a good corporate sign。
Roe is high, but built on the "equity multiplier" (high liability), and the risk is high - open。
Example of calculation
Net profits 300 million, net assets 1. 5 billion:
Roe = 3 / 15 = 20%
If dismantled: a net interest rate of 10% x turnover rate of 1. 0 x equity multiplier of 2. 0 = 20% (by 2 times leverage, beware of liabilities)。
2. 5 roa (total asset rate of return, return on assets)
Definition and interpretation
The company measures the efficiency of the overall utilization of the assets with all the money it earns (including borrowed assets)。
Formula
Roa = net profit / total assets x 100%Different from roe: roe looks only at shareholders' money, roa looks at all assets; high liabilities push up roe, but lower roa, the difference is greater = greater leverage。
2. 6 peg
Definition and interpretation
Put pe and growth together and solve the "high pe will be expensive" miscalculation。
Formula
Peg = pe / profits annual growth (%)Peg
Peg > 1: possible prejudice
Peg = 1: valuation and growth match
Practical application scene
Technology/growth just looking at pe will be expensive, using peg to judge whether it's "excellent"。
Example of calculation
Pe = 30 times the expected annual increase in profitability 30%:
Peg = 30/ 30 = 1. 0 → valuation matches growth, not expensive2. 7 dividend rate (dividend yield)
Definition and interpretation
The annual rate of return on the dividends, the category "equity interest"。
Formula
Dividend rate = annual dividends / share price x 100%Practical application scene
Interest-bearing investors (e. G. Pension allocations) value high dividends (banks, utilities, constant 4-6 per cent)。
The stock price drops, the dividends rise (when the dividends remain constant), and the bear market has a high stock of "bonds" defensive。
Example of calculation
The share is divided by $0. 5 per share, ten
Dividend rate = 0. 5 / 10 = 5 per cent
The unit's “equity gains” are more attractive (subject to the risk of stock price volatility) compared to bank finances of 2-3 per cent。
2. 8 māori rate / net interest rate
Definition and interpretation
Māori rate = (receiving - operating costs) / revenue, reflecting whether the product itself is earned or not。
Net interest rate = net profit / real profit after deduction of all fees and taxes。
Formula
Māori rate = (received - operating costs) / collection x 100%
net interest rate = net profit / received x 100%Practical application scene
Liquor māori rates are high 70-90%, retail māori rates are high
The net interest rate depends on the ability of the company to control three fees (sale/management/finance)。
2. 9 assets and liabilities ratio
Definition and interpretation
The proportion of corporate assets that depend on borrowing measures financial risk。
Formula
Assets and liabilities ratio = total liabilities / total assets x 100 per centPractical application scene
40-60% normal; > 70% high alert; real estate is usually 70-80% (high leverage industry)。
Combining roe dubon to see: high roe is vulnerable if it is highly indebted。
2. 10 dcf (discounted cash flow)
Definition and interpretation
Converting the free cash flow that companies can earn in the future into today's value at a discount rate is the theoretical anchor of "inherent value"。
Formula (simplification of two phases)
Enterprise value = gill[fcf t /(1+r)^ + end value/(1+r)^n
r = discount rate (common wacc or risk-free rate + risk premium)Fcf = free cash flow; t = first year。
Practical application scene
Professional valuations do not have to be self-calculated (parameters are sensitive, prone to error), but know that pe/pb underestimation is "relatively cheap" and that dcf is "absolute value" reference。
Example of calculation (extremely simple)
Next year's free cash flow is projected to be $100 million, a discount rate of 10 per cent, and an increase of 3 per cent:
End value = 100 million x (1+3%) / (10% - 3%) ≈ 14. 77 billion
current value 14. 70 billion / 1. 1 = 13. 44 billion (lowest reference for business value)
