Category: Money tips Release Date: 2007-06-03
Buffett's story about a lot of people talk a lot, but very few people actually go to the system to discuss his legendary investments in technology - how he looks at the plate it?
First, look at return on equity (ROE)
With the net profit divided by net assets, is to get the net return on assets. Formula is: Return on net assets = (net income / net assets) × 100%
This ratio reflects the company's shareholders to obtain the actual rate of return, the target level of return to reflect the interests of shareholders, the higher the index value, indicating the higher investment gains.
For example two companies have earned over 100 million, but a company's ROE is 10%, while the B's ROE is 20%, indicating a higher return on B's.
Net capital gains rate is a measure of corporate shareholders have invested their capital efficiency. It makes up for lack of per-share after-tax profit targets. For example. Song Honggu the existing shareholders in the company right after the earnings per share will decline, resulting in investors a wrong impression that the company's profitability dropped and, in fact, the company's profitability has not changed, with the net return on assets to analyze the company's profitability is more appropriate.
Second, look at earnings per share
Formula is: EPS = profit after tax ÷ Total equity
This ratio reflects the creation of after-tax profit per share, the higher the ratio, indicating that the profit created by the more.
Earnings per share is net income this year, the ratio of the total number of ordinary shares, according to the different values of shares, fully diluted earnings per share and weighted average earnings per share. Fully diluted earnings per share is calculated taking the total number of ordinary shares at the end of the year on the grounds that newly issued shares is generally a premium issue, the new and old shareholders to share the company's earnings before issuing new shares. Earnings per share is the weighted average number of shares available on a monthly basis the calculation of the weighted number of shares the data on the grounds that as the company invested capital and assets is different from the basis of income generated is also different.
Shares in earnings per share refers to the total number of after-tax profit to equity ratio. It is the determination of the value of equity investments, one of important indicators.
Third, look at price-earnings ratio
Fourth, look at earnings growth rate (profit rate)
5 to see if the rate of dividend distribution
