Investment Ratios and Shareholder Evaluation
Principles of Accounting · JC 2 · Financial Statement Analysis and Evaluation · 2.º Período

Investment Ratios and Shareholder Evaluation

Evaluate a company from the perspective of an investor using investment ratios. Calculate earnings per share, price-earnings ratio, and dividend yield.

MOE Syllabus OutcomesSEAB H2 POA Syllabus 9755: Section 4.3

About This Topic

Evaluate a company from the perspective of an investor using investment ratios. Calculate earnings per share, price-earnings ratio, and dividend yield.

Key Questions

  1. How do investors use the price-earnings ratio?
  2. What does dividend yield indicate about a company's maturity?
  3. How do market expectations influence share prices?

More in Financial Statement Analysis and Evaluation

Profitability and Efficiency Analysis

Calculate and interpret profitability and efficiency ratios to assess business performance. Evaluate how well a company utilises its resources to generate returns.

2 methodologies

Liquidity and Solvency Analysis

Assess a company's ability to meet its short-term and long-term obligations. Analyse the working capital cycle and gearing ratios.

2 methodologies

Limitations of Financial Analysis

Critically evaluate the limitations of relying solely on financial ratios for decision-making. Consider non-financial factors and the impact of differing accounting policies.

2 methodologies