Chapter15CompanyAnalysis - ompany Analysis Company Analysis...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ompany Analysis Company Analysis Chapter 15 Charles P. Jones, Investments: Analysis and Management, Tenth Edition, John Wiley & Sons Prepared by G.D. Koppenhaver, Iowa State University 15-1 Fundamental Analysis ast step in top- own approach is Last step in top down approach is company analysis oal: estimate shares intrinsic value Goal: estimate share s intrinsic value Constant growth version of dividend iscount model d o u o d- D P value Intrinsic 1 = = Value justified by fundamentals g k 15-2 Fundamental Analysis arnings multiple could also be used Earnings multiple could also be used P =estimated EPS justified P/E ratio Stock is under- (over-) valued if intrinsic value is larger (smaller) than current market price Focus on earnings and P/E ratio Dividends paid from earnings Close correlation between earnings and stock price changes 15-3 Accounting Aspects of Earnings ow is EPS derived and what does EPS How is EPS derived and what does EPS represent? inancial statements provide majority Financial statements provide majority of financial information about firms nalysis implies comparison over time Analysis implies comparison over time or with other firms in the same industry ocus on how statements used not Focus on how statements used, not made 15-4 Basic Financial Statements alance Sheet Balance Sheet Items listed in order of liquidity or in order of payment Assets Cash vs. non-cash assets Non-cash assets may be worth more or less than carried on books Depreciation methods for fixed assets Inventory evaluation choices 15-5 Basic Financial Statements alance Sheet Balance Sheet Liabilities Fixed claims against the firm g Equity Residual Adjusts when the value of assets change Linked to Income Statement Picture at one point in time 15-6 Basic Financial Statements come Statement BT Income Statement Sales or revenues- roduct costs EBT- T a x e s Net Income Product costs Gross profit- eriod Costs available to owners- ividends Period Costs EBIT- Interest Dividends Addition to Retained Earnings EBT EPS and DPS 15-7 The Financial Statements...
View Full Document

This note was uploaded on 06/02/2011 for the course FINA 3331 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

Page1 / 23

Chapter15CompanyAnalysis - ompany Analysis Company Analysis...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online