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Articles Index - page 3

How to Measure Management Effectiveness before You Buy a Stock
How well is management making use of the company's resources? The answer can tell you a lot about whether you want to own the stock or not.

Why Per-Share Price is Not Important
Market cap is more important than per-share price because market cap tells you the value of the company.

It's the Earnings
Earnings are the single most important factor in stock evaluation for many investors. Although there are other factors to consider, earnings must be near or at the top of every investor's list of important checkpoints.

Understanding Earnings Per Share
Earnings per share or EPS is one way to compare companies, but it does not tell you about market value.

Beware the Dividend Yield Trap
Stocks with high dividend yields may be a smart buy, but they may also be a trap. Always check the other fundamentals before making an investment decision.

Is a Stock Cheap or Expensive?
The sales/price ratio provides a metric for measuring the relative value of a stock's price when compared to industry peers. It is used along with price/earnings ratio.

Using and Misusing the Beta Ratio
A stock's beta ratio is a useful tool for measuring risk, but it does have some serious limitations.

Interest Rates and Stock Valuations
Changes in interest rates effect stock valuations in a fundamental way by changing the required return.

Understanding Earnings Per Share
Earnings per share or EPS is one way to compare companies, but it does not tell you about market value.

Tools of Fundamental Analysis
Fundamental analysis relies on several tools to give investors an accurate picture of the financial health of a company and how the market values the stock.

Understanding Book Value
Book value of a company is the assets minus liabilities.

Understanding Dividend Yield
Dividend Yield tells you what percentage return a company pays out in the form of dividends.

Understanding Dividend Payout Ratio
The dividend payout ratio looks at what percentage of a company's earnings are paid out to shareholders in the form of dividends.

Understanding Price to Book Ratio
The Price to Book ratio is a way to determine how the market values the book value of a company based on the current market price.

Understanding Price to Sales Ratio
The Price to Sales ratio is a tool for evaluating companies with no earnings that looks at how the market values the company's sales.

Understanding the PEG
PEG ratio provides investors a way to calculate how much future earnings growth is going to cost based on the stock's P/E and projected earnings growth rate.

Understanding Return on Equity
Return on equity tells investors how efficiently a company is using its assets to generate earnings.

Tools of Fundamental Analysis
Fundamental analysis relies on several tools to give investors an accurate picture of the financial health of a company and how the market values the stock.

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