Back to notes
Why is Book Value important for evaluating a company?
Press to flip
Book Value represents the net value of the company's assets minus liabilities and helps in understanding the company's worth if sold today.
Describe the significance of Differential Voting Rights (DVR) in equity markets.
Differential Voting Rights (DVR) are shares with varying voting rights and usually different prices compared to ordinary shares. They often offer fewer voting rights and are priced lower, like Tata Motors' DVR shares.
How is Earnings Per Share (EPS) calculated?
Earnings Per Share (EPS) is calculated by dividing the net earnings by the total number of shares.
What method is often used to determine the Intrinsic Value of a company?
The Intrinsic Value is often determined using the Discounted Cash Flow (DCF) method.
Differentiate between Historical, Trailing, and Forward Earnings.
Historical Earnings are past earnings, Trailing Earnings (TTM) represent earnings over the last 12 months, and Forward Earnings are forecasted future earnings.
What does the Price to Book Value Ratio (P/BV) indicate?
The Price to Book Value Ratio (P/BV) is calculated as Market Cap divided by Book Value and indicates the market's valuation of the company's book value.
What is Face Value in the context of equity markets?
Face Value, also known as nominal or par value, is the basic value of a share set by the issuing company (e.g., ₹10).
How do you calculate Market Value of a company's equity?
Market Value is calculated by multiplying the market price of the share by the total number of issued shares, also known as Market Capitalization.
What are Security Premiums?
Security Premiums (or just Premiums) are the additional amounts over the face value that shares are issued for during offerings like IPOs.
What is the Dividend Payout Ratio?
The Dividend Payout Ratio is the ratio of the dividend given out to the net earnings of the company.
What does the Price to Earnings Ratio (P/E Ratio) indicate?
The Price to Earnings Ratio (P/E Ratio) indicates how much the market is willing to pay for a company's earnings and is calculated as Market Price per Share / Earnings per Share.
Explain what Enterprise Value (EV) represents and how it is calculated.
Enterprise Value (EV) represents the total value of the business including both assets and liabilities and is calculated as Total Equity + Total Debt - Cash on hand.
What is Replacement Value, and why is it significant?
Replacement Value is the cost to replace an asset at current market prices. It is significant as it reflects the current cost required to replace the company's assets.
What are the components considered in calculating Enterprise Value (EV)?
Enterprise Value (EV) considers total equity, total debt, and subtracts cash on hand.
Explain the Price to Sales Ratio.
The Price to Sales Ratio is calculated as Market Cap divided by Net Sales.
Previous
Next