A. BOOK VALUE OF A SHARE :
TThe book value per share formula is used to calculate the per share value of a company based on its
equity available to common shareholders. The term "book value" is a company's assets minus its liabilities
and is sometimes referred to as stockholder's equity, owner's equity, shareholder's equity, or simply equity.
Book value per share is just one of the methods for comparison in valuing of a company. Enterprise value, or firm value, market value,
market capitalization, and other methods may be used in different circumstances or compared to one another for contrast.
B. EARNING PER SHARE Ratio | EPS Ratio
To calculate the ratio, subtract any dividend payments due to the holders of preferred stock from net
income after tax, and divide by the average number of common shares outstanding during
the measurement period. The calculation is:
Net income after tax - Preferred stock dividends
Average number of common shares outstanding
C. P/E RATIO
The price earnings ratio can be derived as either the current market price per share, divided by
earnings per share, or as the total current company market capitalization, divided by net after-tax
earnings. The earnings listed in the denominator of the ratio are for the preceding 12 months. The
results of either calculation are the same. The formula using
individual share information is:
Current market price per share
Earnings per share
If a company is reporting loss, than there will be No Price earning Ratio.
D. DIVIDEND
This is share of Profit. It’s an Amount of Profit which the Management of Company declares to pay to
its Shareholders. It shows the cash richness or reserve strength of the Company. But it can not be
trusted 100% for the Investment or for long term.
E. PROMOTER’S STAKE
This is a Stake of percentage of total equity shares which is held by the Promoters of the Company.