26 February 2010

Bursa Malaysia tips: Free Effective Analysis tools in investment - Formula

People who can read the number know the trend of market. To be able read a financial statement is an essential skill to estimate a company performance in the future. Here are some financial formula to help you more understand about a financial statement.

Basic Formula
Shareholder’s Equity = Assets – Liabilities
EPS Earning per Share = Net Profit after Tax/Total No. of Shares
NTA Net Tangible Asset = Net Tangible Asset/No. of Shares
ROE Return on Equity = EPS/NTA or Net Income/Shareholder’s Equity
PE Price Earning Ratio = Market Price/EPS
DY Dividend Yield = Annual Dividend per share/Market Price

Performance Ratio Formula
Gross Profit Margin = (Profit Before Tax/Turnover)*100
Net Profit Margin = (Profit After Tax/Turnover)*100
Current Assets Turnover = Revenue/Current Assets
Fixed Assets Turnover = Revenue/Fixed Assets
Total Assets Turnover = Revenue/Total Assets
Revenue Per Share = Revenue/Issued Shares
Inventory Turnover = Revenue/Inventory

Liquidity Ratio Formula
Current Ratio = Current Assets/Current Liabilities
Acid Test Ratio = (Current Assets-Stock)/Current Liabilities
Interest Coverage = Profit Before Tax/Interest Charge

Growth Ratio Formula
Annual Revenue Growth Rate(%) = ((Current Year Revenue-Last Year Revenue)*100)/Last Year Revenue
Annual Profit Growth Rate (%) = ((Current Year Profit-Last Year Profit)*100)/Last Year Profit

Debt Ratio Formula
Debtors Turnover (Days) = (Debtors/Turnover)*365
Creditors Turnover (Days) = (Creditors/Turnover)*365
Debt Ratio (%) = (Total Liabilities/Total Assets)*100
Current Debt To Equity Ratio (%) = (Current Liabilities/Shareholders Fund)*100
Total Debt To Equity Ratio (%) = (Total Liabilities/Shareholders Fund)*100

Warrant Formula
Gearing = Market Price /Warrant Price (Big)
Parity = Market Price /Convert Price (Small)
Convert Price Differential= [(Warrant Price + Convert Price) – Market Price] / Market Price (Big)

Note: All contents shall not be treated as a recommendation but are solely the opinions of the author. Any action that one taken as a result of information from this site is ultimately ones responsibility. Consult your investment adviser before making any investment decisions, if necessary.