1)Plough back(reserves for re-investing in comp. growth)
2)Compare reserves with equity capital (check whether bonus can be issued) *Thumb-rule :- Reserves=2*Equity capital (bonus share issued)
3)Book Value per share = Shareholders' funds / Total number of equity shares issued *Shareholders' funds=Equity capital+Reserves
4)Earnings Per Share (EPS) = Profit After Tax / Total number of equity shares issued
5)Price/Earnings Ratio (P/E) = Price of the share / Earnings per share
6)High growth companies generally have a poor dividend record. This is because such companies use only a relatively small proportion of their earnings to pay dividends. In the long run, however, high growth companies not only offer steep capital appreciation but also end up paying higher dividends
7)Yield = (Dividend per share / market price per share) x 100
8)Return on capital employed (ROCE) is best defined as operating profit divided by capital employed (net worth plus debt). *The figure for operating profit is arrived at after adding back taxes paid, depreciation, extraordinary one-time expenses, and deducting extraordinary one-time income and other income (income not earned through mainline operations), to the net profit figure.
9)Return on net worth (RONW) is defined as net profit divided by net worth. It is a basic ratio that tells a shareholder what he is getting out of his investment in the company
10)PEG is calculated by dividing the P/E by the forecasted growth rate in the EPS (earnings per share) of the company. *As a broad rule of the thumb, a PEG value below 0.5 indicates a very attractive buying opportunity, whereas a selling opportunity emerges when the PEG crosses 1.5, or even 2 for that matter.
