Dividend yield ratio tells investors how much cash income they are receiving on their equity investment in the business. This is calculated by dividing the annual dividend per share by the current market price of the stock. This can be compared with the interest rates of high grade debt securities that pay interest, such as the most secure treasure or state note.
The book value per share is calculated by dividing the owner's total capital by the total number of issued shares. EPS is more important to determine the market value of the stock, but the book value per share is the following debt, the company's assets of the net assets to back up the business stock This is the market value of the stock one share There is a possibility that it may become smaller than the book value of hit.
Return on equity (ROE) ratio tells bus8iness how much profit earned compared to the stock value of its shareholders. This ratio is particularly useful for private business that has no way to determine the current value of the owner's equity. ROE is also calculated for public enterprises, but it plays a secondary role in other proportions. The ROE is calculated by dividing the net profit by the owner's equity.
The current ratio is a measure of the short-term solvency of business, in other words, the ability to pay liabilities that occur in the near future. This ratio indicates whether cash collected from cash and cash collected from accounts receivable and cash from inventory are sufficient to repay the debt incurred during the next period This is the result of dividing current assets by current liabilities It is calculated. An enterprise is expected to maintain a current ratio of at least 2: 1, meaning that current asset must be its current liability twice.
43 What is the difference between private and public company reports
Public Corporation is a business in which securities are traded on public stock exchanges such as New York Stock Exchange and Nasdaq. Private companies are held only by their owners and are not publicly traded. When private shareholders receive periodic financial reports they are entitled to assume that their financial statements and footnotes have been prepared in accordance with GAAP, otherwise the business executive's chief executive The president obviously needs to warn shareholders that GAAP does not continue in more than one point. The content of the private business's annual financial report is often minimal. This includes three main financial statements: the balance sheet, the income statement and the cash flow statement. Chief executives, photographs, letters from charts are generally not.
In contrast, the annual report of the publicly traded company has many bells with it. In addition, report requirements are increasing. They present top management interpretation and analysis of business revenue performance and other important financial trends throughout the year, and management discussion and analysis (MD & A)
Another section necessary for public companies is EPS per share. This is the only ratio that most public companies report as well as some others, but public works are required to report. In addition, an annual comparative profit and loss statement is required.
Many public enterprises make their required applications with the SEC, but they present very different annual financial reports to their shareholders. Many publicly traded companies only contain condensed financial information, not comprehensive financial statements. They generally refer to the detailed SEC financial report by the reader for more detailed details.
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