Beta The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative.

Slides:

Advertisements

Similar presentations

Learning Objective # 3 Explain how you can evaluate stock investments. LO#3.

Advertisements

Firm Valuation: A Summary

MGT 497 Financial, Trends, Ratios

Investment Club PowerPoint 3 Some important things we should all know …. Conceptual Understanding of … 4.Stochastics 5.Earnings per Share ratio 6.Beta.

Chapter 6 Common Stock Valuation: The Inputs. 6-2 Valuation Inputs Now that we have an understanding of the models used, we are going to focus on developing.

Foundations of Business

Understanding Stocks Definitions Dividend: part of a corporations earnings (profits) that are paid back to the stockholder. Price/Equity ratio: price to.

Financial Statements Economics 98 / 198 Fall 2007 Copyright 2007 Jason Lee.

Equity Valuation Models

Valuation: Principles and Practice: Part 1 – Relative Valuation 03/03/08 Ch. 12.

INVESTMENTS | BODIE, KANE, MARCUS Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written.

Lecture No.14 Chapter 4 Contemporary Engineering Economics Copyright © 2010 Contemporary Engineering Economics, 5th edition, © 2010.

Stock Market. 14 year old investor What are Some of Your Favorite Companies?

FINANCIAL STATEMENT ANALYSIS UNIT 12 Analysing financial statements involves evaluating three characteristics of a company: 1. its liquidity 2. its profitability.

 Stock: A share of ownership in a corp.  Shareholder: Partial business owner  Limited Liability- Can only lose up to what you invested!!  2 types of.

Financial Accounting Dave Ludwick, P.Eng, MBA, PMP, PhD Chapter 20 Ratios Analysis.

Standard 4.0 Investigate opportunities available for saving and investing. 4.3Evaluate methods of investing. a. Stocks and Bonds Our Goals Learn The Rules.

Investments: Analysis and Behavior Chapter 10- Financial Statement Analysis ©2008 McGraw-Hill/Irwin.

AIM How do we analyze stocks based on their financial data? DO NOW How can we use financial reports (Annual and Quarterly reports) to help us decide when.

What Is Risk? Before You Invest. What is Risk? Jamie wanted advice about the best way to make money on money she received for her birthday. Her brother.

FINANCIAL PERFORMANCE ACCOUNTING RATIOS. Accounting Ratio Analysis Information contained in financial statements is of major significant to internal and.

Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved Investing in Financial Assets Lecture.

1 Valuing the Enterprise: Free Cash Flow Valuation Discount estimates of free cash flow that the firm will generate in the future. WACC: after-tax weighted.

W.I.S.E. INVE$TOR$ CLUB Stock Study Guide Sections 2 & 3 Created by: Marlene A. Jordan.

Stock Market Game. Ticker Symbol – Symbol identifying the stock – this is how you identify stocks for purchase and also when researching Example: Apple.

Financial Ratios Clicker Quiz. What is this ratio? Market Price Per Share Earnings Per Share A. Inventory Turnover B. Accounts Receivable Turnover C.

Stock Valuation. Learning Goals What is stock valuation model. How to value good and bad stock.

Revise Lecture 17. Financial Ratios Ownership ratios Ownership ratios assist the stockholder in analyzing present and future investments in a company.

Welcome to Presentation. Presentation on Cross sectional analysis between Metro spinning & Saiham textile.

Chapter 14.  To make informed decisions about a company  Generally based on comparative financial data ◦ From one year to the next ◦ With a competing.

Evaluating Companies. Research: Products Earnings Debt Performance Consider: PROFITABILITY GROWTH POTENTIAL VALUATION.

Capital Structure. Effect of Corporate Taxes So far capital structure was irrelevant. What if we introduces corporate taxes? Corporate taxes are paid after.

GI Beginners’ Series: Class III November 30, 2007.

INVESTING BASICS. A. THE STOCK MARKET STOCKS- UNIT OF OWNERSHIP IN A CORPORATION. STOCKS EXPLAINED.

Equity Valuation VALUATION BY COMPARABLES  Basic Types of Models ◦ Balance Sheet Models ◦ Dividend Discount Models ◦ Price/Earnings Ratios.

V. STOCKS. L. RATIO ANALYSIS 1.Ratios That Measure Liquidity (the firm’s ability to convert assets into cash) a.Current Ratio = Current Assets Current.

P/E Ratio P/E ratio = current share price / E.P.S., where E.P.S. is earnings per share P/E ratio = current share price / E.P.S., where E.P.S. is earnings.

Finance 206 Evaluating a firm’s Financial Performance.

CHAPTER 11 FINANCIAL STATEMENT ANALYSIS McGraw-Hill/Irwin©The McGraw-Hill Companies, Inc., 2002.

Financial Ratio Analysis

Top Paying Jobs by Major Sales Director: $122,000Sales Director Pharmaceutical Sales Representative: $84,400Pharmaceutical Sales Representative Account.

 Fundamental Analysis By Martin Brenner. What is Fundamental Analysis?  A method of evaluating a security that entails attempting to measure its intrinsic.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Cost of Capital Cost of Capital - The return the firm’s.

 A market in which stocks are down  Those who buy and sell stocks.

© 2006 Prentice Hall Business Publishing Introduction to Financial Accounting, 9/e © 2006 Prentice Hall Business Publishing Introduction to Financial Accounting,

1 Press Ctrl-A ©G Dear2010 – Not to be sold/Free to use Value Shares Stage 6 - Year 11 Applied Mathematic (Preliminary General 1)

DES Chapter 4 1 DES Chapter 4 Estimating the Value of ACME.

HOW TO READ A STOCK QUOTATION, TERMS AND DEFINITIONS Interpreting Stock Data.

Interpreting Stock Data on the Internet Stock Market Game.

Stock Terminology (continued) Investors make money in stocks in two ways: –Dividends Companies may make payment to shareholders as part of the profits.

Equity Valuation. Methods Balance Sheet Models Discounted Cash Flow Models Multiplier Models.

Estimating the Value of ACME 1. Steps in a valuation Estimate cost of capital (WACC) – Debt – Equity Project financial statements and FCF Calculate horizon.

Valuing a Company What determines a companies worth?

A beginner’s guide.  Prev Close:  Open: 106  1y Target Est:  Day’s Range:  52wk Range:

Estimating the Value of ACME

Investing in Financial Assets

Liquidity and Efficiency

Financial Statement Analysis

Case Study for final exam review

Analysis Example Financial Ratio

Investment Analysis.

Warm Up What does it mean when a person has stock in a company?

Estimating the Value of ACME

Financial Metrics October 10, Jigar Bhakta.

Stock Basics Ms. Zucchero.

Stock Basics Ms. Zucchero.

Earnings per Share (EPS)

© 2014 Cengage Learning. All Rights Reserved.

Weighted Average Cost of Capital (Ch )

Presentation transcript:

Beta The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative to the overall market. Example: DNB.67 Less than 1 means that the risk is lower than the market average

Beta Stocks that have a beta greater than 1 have greater price volatility than the overall market and are more risky. Stocks with a beta of 1 fluctuate in price at the same rate as the market. Stocks with a beta of less than 1 have less price volatility than the market and are less risky

Beta - Risk Risk also implies return. Stocks with a high beta should have a higher return than the market. If you are accepting more risk, you should expect more reward. Investors can find the best use of the beta ratio in short-term decision-making, where price volatility is important. If you are planning to buy and sell within a short period, beta is a good measure of risk.

Book Value - definition The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation. Example: DNB & WFM Read more: /bookvalue.asp#ixzz1nL4tw3S1http:// /bookvalue.asp#ixzz1nL4tw3S1

1. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated. 2. By being compared to the company's market value, the book value can indicate whether a stock is under- or overpriced. Read more: okvalue.asp#ixzz1nL59N9w6market valuehttp:// okvalue.asp#ixzz1nL59N9w6

Price – Earnings Ration (P/E ratio) A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as:current share Market Value per Share Earnings per Share (EPS) For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be ($43/$1.95). Read more: earningsratio.asp#ixzz1nL7DuZPXhttp:// earningsratio.asp#ixzz1nL7DuZPX

Earnings per Share (EPS) portion of a company’s profit allocated to each outstanding share of common stock. For instance, a corporation that earned $10 million last year and has 10 million shares outstanding would report earnings of $1 per share. Read more: -per-share#ixzz1nL9pK2Czhttp:// -per-share#ixzz1nL9pK2Cz