Reading Financial Data of a Company That is Listed in the Stock Market

Introduction

Every time you decide to venture into the world of stock investing, it’s like planning a trip to a new destination. Sure, you’re excited, but it’s essential to have a roadmap. For stock investors, understanding a company’s financial data is that roadmap. It gives you a clear picture of where the company stands and what the journey ahead might look like.

“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” - Benjamin Graham

Let’s dive deep into this fascinating world of numbers, charts, and statements, and learn how to interpret them. Buckle up!

Balance Sheet: A Company’s Financial Snapshot

Imagine you’re trying to understand the wealth and debts of a friend named Tom. You’d list out all of Tom’s assets (things he owns), and then subtract all the debts he owes. The balance sheet is that list for a company, showing assets, liabilities, and shareholder equity.

For instance, as of Q4 2022, Apple had total assets worth about $338 billion and total liabilities of approximately $258 billion. This means their shareholder’s equity, which is essentially the net worth of the company, stood at $80 billion.

Income Statement: The Profit and Loss Tale

Think of the income statement as a diary where a company writes about its earnings and expenses over a period. It tells you how much the company earned (its revenues) and how much it spent (its expenses). The difference is the net income, which shows the profit or loss.

“Do not take yearly results too seriously. Instead, focus on four or five-year averages.” - Warren Buffet

Let’s take an example: In 2022, Microsoft reported a revenue of $168 billion. After subtracting all their operational costs, interest, taxes, etc., their net income stood at $61 billion. Now, that’s a diary entry every investor would love to read!

Cash Flow Statement: Tracking the Cash

Imagine water flowing through various channels in a field. Similarly, the cash flow statement tracks how cash flows into and out of a company. It categorizes the cash flow into three types:

Operating Activities: Cash from the main business, like selling iPhones for Apple.
Investing Activities: Cash used or generated from investments, like when Netflix invests in producing a new show.
Financing Activities: Cash from investors or paid to shareholders, like when Amazon issues new shares or pays dividends.

EPS is a significant number for investors. If a company’s total earnings are a big pie, EPS tells you how much slice of the pie belongs to a single share. The higher the EPS, the more profitable the company.

For example, if Amazon earned $10 billion and had 500 million shares in circulation, the EPS would be $20.

Certainly! Earnings Per Share (EPS) is a key financial metric used to determine a company’s profitability. It represents the portion of a company’s profit allocated to each share of common stock. To calculate EPS, one divides the company’s net income by the number of outstanding shares.

Here’s a hypothetical example of the EPS for three tech companies:

1. TechCompanyA:

Net Income: $1 billion
Number of Outstanding Shares: 500 million EPS = Net Income / Number of Outstanding Shares EPS = $1 billion / 500 million = $2 per share

2. TechCompanyB:

Net Income: $2 billion
Number of Outstanding Shares: 1 billion EPS = $2 billion / 1 billion = $2 per share

3. TechCompanyC:

Net Income: $500 million
Number of Outstanding Shares: 200 million EPS = $500 million / 200 million = $2.50 per share

Comparison: All three companies have impressive EPS figures. However, based purely on EPS:

TechCompanyA has an EPS of $2
TechCompanyB also has an EPS of $2
TechCompanyC has the highest EPS at $2.50

Based solely on the EPS metric, TechCompanyC seems to be the most profitable relative to its number of shares, thus making it seem like a better buy.

However, it’s important to understand that investing decisions shouldn’t be based on a single metric. Investors should look at a combination of factors such as the Price-to-Earnings ratio (P/E), growth prospects, competitive positioning, management quality, and other financial metrics to make a well-informed decision. It’s also essential to consider the company’s future prospects, industry trends, and other qualitative factors when deciding to buy stock in a company.

Earnings Yield

Earnings yield is the inverse of the Price-to-Earnings (P/E) ratio. It is calculated by dividing the Earnings Per Share (EPS) by the stock’s current price per share. Earnings yield provides an idea of the amount of return you might expect to earn on an investment in the stock if all of the company’s earnings were distributed to its shareholders.

Let’s assume we have the following data for three hypothetical tech companies:

1. TechCompanyA:

Stock Price: $50
EPS: $5 Earnings Yield = EPS / Stock Price Earnings Yield = $5 / $50 = 0.10 or 10%

2. TechCompanyB:

Stock Price: $100
EPS: $8 Earnings Yield = $8 / $100 = 0.08 or 8%

3. TechCompanyC:

Stock Price: $25
EPS: $3 Earnings Yield = $3 / $25 = 0.12 or 12%

Comparison: Based solely on the earnings yield:

TechCompanyA has an earnings yield of 10%
TechCompanyB has an earnings yield of 8%
TechCompanyC has the highest earnings yield at 12%

Based purely on earnings yield, TechCompanyC seems to offer the highest return relative to its stock price, thus making it seem like a better buy.

However, it’s crucial to remember that, like any financial metric, earnings yield should not be the only consideration when deciding to invest in a company. Other factors like growth prospects, competitive positioning, dividend payments, and overall market conditions play a significant role in determining the attractiveness of a stock. It’s also essential to understand that a higher earnings yield might sometimes indicate that the market perceives higher risks associated with the company, and therefore it’s priced lower. Always conduct comprehensive due diligence before making any investment decisions.

Book Value Per Share (BVPS) is a financial metric that provides an idea of a company’s net asset value on a per-share basis. It is calculated by subtracting liabilities from total assets and then dividing by the number of outstanding shares. BVPS essentially tells you what would remain for stockholders if a company were to liquidate all its assets and pay off all its liabilities.

Here’s a hypothetical example of BVPS for three tech companies:

1. TechCompanyA:

Total Assets: $10 billion
Total Liabilities: $5 billion
Number of Outstanding Shares: 500 million

BVPS = (Total Assets - Total Liabilities) / Number of Outstanding Shares BVPS = ($10 billion - $5 billion) / 500 million = $10 per share

2. TechCompanyB:

Total Assets: $15 billion
Total Liabilities: $10 billion
Number of Outstanding Shares: 300 million

BVPS = ($15 billion - $10 billion) / 300 million = $16.67 per share

3. TechCompanyC:

Total Assets: $8 billion
Total Liabilities: $4 billion
Number of Outstanding Shares: 400 million

BVPS = ($8 billion - $4 billion) / 400 million = $10 per share

Comparison: Based on the BVPS:

TechCompanyA has a BVPS of $10
TechCompanyB has the highest BVPS at $16.67
TechCompanyC also has a BVPS of $10

Based solely on BVPS, TechCompanyB seems to have the highest net asset value relative to its number of shares, which could indicate a more attractive buy. However, a higher BVPS doesn’t necessarily mean the company is a better investment. Investors might also consider other metrics like Price-to-Book ratio (P/B), which gives a sense of how much investors are paying for the net assets of the company.

Furthermore, it’s essential to understand that BVPS is more relevant for sectors like banking, where assets and liabilities on the balance sheet play a central role in evaluating the company. For many tech companies, intangible assets like intellectual property, brand value, and growth prospects might not be fully reflected in the BVPS.

As always, it’s recommended to look at a combination of factors and conduct thorough research before making an investment decision.

The Price-to-Book (P/B)

The Price-to-Book (P/B) ratio is a financial metric that compares a company’s market price per share to its book value per share (BVPS). It is calculated by taking the current share price and dividing it by the BVPS. The P/B ratio indicates how much investors are willing to pay for each dollar of net assets.

Let’s assume we have the following data for three hypothetical tech companies:

1. TechCompanyA:

Current Share Price: $120
BVPS: $60 P/B Ratio = Current Share Price / BVPS P/B Ratio = $120 / $60 = 2.0

2. TechCompanyB:

Current Share Price: $50
BVPS: $25 P/B Ratio = $50 / $25 = 2.0

3. TechCompanyC:

Current Share Price: $80
BVPS: $40 P/B Ratio = $80 / $40 = 2.0

Comparison: Based on the P/B ratios:

All three companies, TechCompanyA, TechCompanyB, and TechCompanyC, have a P/B ratio of 2.0.

From the data provided, all three companies appear to be equally valued by the market relative to their book values. When the P/B ratio is at 1.0, it means that the market price is equal to its book value. A ratio above 1 indicates that the stock might be overvalued, while a ratio below 1 could suggest undervaluation. However, in the tech industry, a P/B ratio above 1 is common because the value of intangible assets (e.g., software, patents) often isn’t fully reflected in the book value.

Although the P/B ratio is the same for all three companies in this example, investors should take other factors into consideration, such as growth potential, competitive landscape, profitability, and other financial metrics, before making an investment decision. Additionally, industry averages can provide context for whether a company’s P/B ratio is high or low relative to its peers.

The Price-to-Cash Flow Ratio (P/CF)

The Price-to-Cash Flow Ratio (P/CF) measures the value of a stock’s price relative to its operating cash flow per share. This tool helps investors determine a company’s valuation concerning the cash it generates.

For P/CF: Price-to-Cash Flow Ratio = Current Share Price divided by Operating Cash Flow Per Share.

Here’s an example for three tech companies:

1. TechCompanyA:

Current Share Price: $100
Operating Cash Flow Per Share: $10 Price-to-Cash Flow Ratio = 100 divided by 10 = 10

2. TechCompanyB:

Current Share Price: $150
Operating Cash Flow Per Share: $15 Price-to-Cash Flow Ratio = 150 divided by 15 = 10

3. TechCompanyC:

Current Share Price: $60
Operating Cash Flow Per Share: $4 Price-to-Cash Flow Ratio = 60 divided by 4 = 15

Comparison: Based on the P/CF ratios:

TechCompanyA and TechCompanyB both have a P/CF ratio of 10.
TechCompanyC has a P/CF ratio of 15.

A lower P/CF ratio suggests you’re paying less for each dollar of cash flow, which might indicate better value. In this example, TechCompanyA and TechCompanyB appear to offer better value compared to TechCompanyC.

It’s essential to consider other factors, such as growth rates, stability of cash flows, and competitive positioning. Also, comparing the P/CF ratio to industry averages can give a better understanding of its relative value.

Price to Earnings (P/E) Ratio: The Price Tag

The Price-to-Earnings Ratio (P/E Ratio) is one of the most commonly used valuation metrics for stocks. It measures the price you pay for every dollar of earnings. The P/E Ratio is calculated as:

P/E Ratio = Current Share Price divided by Earnings Per Share (EPS)

Let’s look at hypothetical examples for three tech companies:

1. TechCompanyA:

Current Share Price: $100
EPS (Earnings Per Share): $5 P/E Ratio = $100 / $5 = 20

2. TechCompanyB:

Current Share Price: $150
EPS: $10 P/E Ratio = $150 / $10 = 15

3. TechCompanyC:

Current Share Price: $200
EPS: $8 P/E Ratio = $200 / $8 = 25

Comparison: Based on the P/E ratios:

TechCompanyA has a P/E ratio of 20
TechCompanyB has the lowest P/E ratio at 15
TechCompanyC has the highest P/E ratio at 25

The P/E ratio provides an idea of how much investors are willing to pay for each dollar of earnings. A lower P/E ratio might suggest that the stock is undervalued, while a higher P/E could indicate overvaluation or that investors expect higher growth in the future.

Based purely on the P/E ratio, TechCompanyB seems to be the most attractively valued as you are paying the least for each dollar of its earnings. However, it’s crucial to understand that a lower P/E doesn’t necessarily mean it’s the best investment. Factors such as growth prospects, competitive positioning, and the broader industry trends should be considered.

It’s also worth noting that tech companies, especially those in the growth phase, might have higher P/E ratios than companies in more mature or stable industries. The key is to compare the P/E ratio to industry peers and consider it in the context of other financial and strategic factors before making investment decisions.

Free Cash Flow Per Share (FCFPS) provides insight into a company’s financial health by showing how much cash is available to shareholders after all expenses, reinvestments, and capital expenditures are considered. It’s a useful metric for evaluating a company’s ability to generate shareholder value.

The formula for FCFPS is:

FCFPS = Free Cash Flow / Number of Outstanding Shares

Let’s consider hypothetical data for three tech companies:

1. TechCompanyA:

Free Cash Flow: $1 billion
Number of Outstanding Shares: 200 million FCFPS = $1 billion / 200 million = $5 per share

2. TechCompanyB:

Free Cash Flow: $800 million
Number of Outstanding Shares: 100 million FCFPS = $800 million / 100 million = $8 per share

3. TechCompanyC:

Free Cash Flow: $600 million
Number of Outstanding Shares: 150 million FCFPS = $600 million / 150 million = $4 per share

Comparison: Based on FCFPS:

TechCompanyA has an FCFPS of $5
TechCompanyB has the highest FCFPS at $8
TechCompanyC has an FCFPS of $4

From the data provided, TechCompanyB is generating the highest Free Cash Flow Per Share, suggesting that, all else being equal, it may be in the best position to reward shareholders through dividends, buybacks, or reinvesting in growth opportunities.

However, just like any other financial metric, FCFPS should not be viewed in isolation. It’s essential to understand the reasons behind the FCF, the company’s future growth prospects, competitive positioning, capital expenditure needs, and other relevant financial and strategic factors. It’s always recommended to conduct a comprehensive financial analysis and consider multiple metrics when evaluating investment opportunities.

Price-to-Free Cash Flow Ratio (P/FCF)

The Price-to-Free Cash Flow Ratio (P/FCF) is a valuation metric that compares a company’s market price to its free cash flow. It helps investors gauge the value of a company based on its ability to generate cash. A lower P/FCF ratio may suggest that the company is undervalued, while a higher ratio may suggest overvaluation, all else being equal.

Formula: P/FCF = Market Price per Share / Free Cash Flow per Share

Where:

Market Price per Share is the current stock price.
Free Cash Flow per Share can be calculated by dividing the total free cash flow (FCF) by the number of outstanding shares.

Examples:

Let’s consider hypothetical figures for three tech companies: A, B, and C.

Company A:

Market Price per Share: $100
Free Cash Flow per Share: $5

P/FCF ratio = 100 / 5 = 20

Company B:

Market Price per Share: $150
Free Cash Flow per Share: $7.5

P/FCF ratio = 150 / 7.5 = 20

Company C:

Market Price per Share: $200
Free Cash Flow per Share: $8

P/FCF ratio = 200 / 8 = 25

Comparison:

From the figures above:

Company A and Company B both have a P/FCF ratio of 20.
Company C has a P/FCF ratio of 25.

Interpreting these results, one might deduce that Companies A and B offer better value for every dollar of free cash flow they produce compared to Company C. Therefore, between the three, Companies A and B might be more attractive to an investor based solely on this metric.

Important Notes:

The P/FCF ratio is just one of many metrics investors use to assess a company’s valuation. It’s crucial to consider other financial metrics, qualitative factors, the company’s growth prospects, competitive position, and industry trends before making an investment decision.
Different industries can have different average P/FCF values, so it’s helpful to compare companies within the same industry.
It’s also crucial to understand why a company might have a particularly high or low P/FCF. For instance, a company might have a temporarily depressed FCF due to capital expenditures that could boost future growth.

For real-life application, investors would look at actual figures from companies’ financial statements and possibly utilize financial databases or platforms to retrieve up-to-date stock prices and FCF figures.

Price-to-Sales Ratio (P/S Ratio)

The Price-to-Sales Ratio (P/S Ratio) is a valuation metric that compares a company’s stock price to its revenues. It’s particularly useful for evaluating companies that might not be profitable yet but are generating significant sales. A lower P/S ratio may indicate that the stock is undervalued relative to its sales, while a higher P/S ratio may indicate overvaluation.

Formula: P/S Ratio = Market Capitalization / Total Sales (or Revenue)

Where:

Market Capitalization is the total value of all of a company’s shares of stock. It is equal to the company’s share price multiplied by the number of outstanding shares.
Total Sales (or Revenue) is the total amount of money taken in by the company for the sale of its goods and services.

Examples:

Let’s consider hypothetical figures for three tech companies: X, Y, and Z.

Company X:

Market Capitalization: $10 billion
Total Sales: $2 billion

P/S Ratio = 10 / 2 = 5

Company Y:

Market Capitalization: $20 billion
Total Sales: $8 billion

P/S Ratio = 20 / 8 = 2.5

Company Z:

Market Capitalization: $15 billion
Total Sales: $3 billion

P/S Ratio = 15 / 3 = 5

Comparison:

From the figures above:

Company X and Company Z both have a P/S ratio of 5.
Company Y has a P/S ratio of 2.5.

Based solely on the P/S ratio, Company Y appears to offer better value as you’re paying less for each dollar of sales compared to Companies X and Z. Thus, an investor might consider Company Y more attractive based on this metric alone.

Important Notes:

Just like the P/FCF ratio, the P/S ratio is one of many metrics investors should consider. It’s especially useful for businesses in the tech sector where earnings might be negative due to growth investments, but sales are still robust.
Always compare companies within the same industry. Different industries have different average P/S values.
A low P/S ratio doesn’t necessarily mean a company is undervalued. It could indicate that the market has concerns about the company’s ability to turn sales into profits.

For real-world analysis, you’d look at actual figures from company financial statements and utilize stock market data to get current market capitalizations.

The Tangible Book Value Per Share (TBVPS) measures a company’s net asset value minus all intangible assets (like patents, trademarks, and goodwill) and liabilities, all divided by the number of shares outstanding. In essence, it tells an investor what the company would be worth if it were to be liquidated today, ignoring any potential value from intangible assets.

Formula: TBVPS = (Total Assets - Intangible Assets - Total Liabilities) / Number of Outstanding Shares

Examples:

Let’s consider hypothetical figures for three tech companies: Alpha, Beta, and Gamma.

Company Alpha:

Total Assets: $10 billion
Intangible Assets: $2 billion
Total Liabilities: $4 billion
Outstanding Shares: 500 million

TBVPS = (10 - 2 - 4) / 0.5 = 8 / 0.5 = $16 per share

Company Beta:

Total Assets: $20 billion
Intangible Assets: $8 billion
Total Liabilities: $10 billion
Outstanding Shares: 400 million

TBVPS = (20 - 8 - 10) / 0.4 = 2 / 0.4 = $5 per share

Company Gamma:

Total Assets: $15 billion
Intangible Assets: $5 billion
Total Liabilities: $8 billion
Outstanding Shares: 250 million

TBVPS = (15 - 5 - 8) / 0.25 = 2 / 0.25 = $8 per share

Comparison:

From the figures above:

Company Alpha has a TBVPS of $16.
Company Beta has a TBVPS of $5.
Company Gamma has a TBVPS of $8.

If we were to only consider the TBVPS, Company Alpha appears to offer the highest tangible value per share. This might be seen as offering better value to an investor since, in theory, it implies that for each share of Company Alpha you buy, you’re getting $16 worth of tangible assets (after all debts are paid).

However, it’s important to note:

TBVPS is a measure of liquidation value. In the real world, a company’s ongoing operations, growth prospects, intangible assets, and other factors play a crucial role in its stock valuation.
Companies with a high amount of intangible assets (e.g., tech companies with patents or brands with significant goodwill) might have lower TBVPS.
It’s essential to look at other metrics and qualitative factors when assessing the overall attractiveness of a stock.

As always, for a complete analysis, one would combine TBVPS with other metrics and an understanding of each company’s industry position, competitive dynamics, growth prospects, and more.

Price-to-Tangible Book Ratio (P/TB Ratio)

The Price-to-Tangible Book Ratio (P/TB Ratio) is a valuation metric that compares a company’s market price per share to its tangible book value per share. Essentially, it indicates how much investors are willing to pay for each dollar of tangible assets. A lower P/TB might suggest that a stock is undervalued relative to its tangible assets, while a higher P/TB might indicate overvaluation.

Formula: P/TB Ratio = Market Price per Share / Tangible Book Value Per Share

Where:

Market Price per Share is the current stock price.
Tangible Book Value Per Share is calculated as (Total Assets - Intangible Assets - Total Liabilities) / Number of Outstanding Shares.

Examples:

Using hypothetical figures for three tech companies: Delta, Epsilon, and Zeta.

Company Delta:

Market Price per Share: $50
Tangible Book Value Per Share (from previous calculations or provided data): $20

P/TB Ratio = 50 / 20 = 2.5

Company Epsilon:

Market Price per Share: $100
Tangible Book Value Per Share (from previous calculations or provided data): $40

P/TB Ratio = 100 / 40 = 2.5

Company Zeta:

Market Price per Share: $30
Tangible Book Value Per Share (from previous calculations or provided data): $10

P/TB Ratio = 30 / 10 = 3

Comparison:

From the figures above:

Company Delta and Company Epsilon both have a P/TB ratio of 2.5.
Company Zeta has a P/TB ratio of 3.

Based only on the P/TB ratio, Companies Delta and Epsilon seem to offer better value as you’re paying 2.5 times the tangible book value for their stocks, while for Company Zeta, you’re paying 3 times the tangible book value.

However, it’s crucial to understand:

A lower P/TB ratio doesn’t necessarily mean the stock is a bargain. The company might have issues affecting its value that aren’t reflected in its tangible book value.
Different industries have different average P/TB values, so comparing companies within the same sector can provide better insights.
The reasons for a particularly high or low P/TB should be understood. For example, a company might have recently written off significant assets, thereby reducing its tangible book value.

For comprehensive stock evaluations, investors should consider a myriad of financial metrics, industry trends, and qualitative aspects of companies.

Price/Earnings to Growth Ratio (PEG Ratio)

The PEG Ratio is a valuation metric that adjusts the traditional P/E ratio by the growth rate of a company’s earnings. The PEG Ratio provides a more comprehensive view of a company’s valuation by considering its future earnings growth potential. A lower PEG ratio might suggest that a stock is undervalued given its growth prospects, while a higher PEG ratio might indicate overvaluation.

Formula: PEG Ratio = P/E Ratio / Annual EPS Growth Rate

Where:

P/E Ratio is the Price-to-Earnings Ratio, which is the Market Price per Share divided by Earnings Per Share (EPS).
Annual EPS Growth Rate is the projected annual growth rate of a company’s earnings, expressed as a percentage.

Examples:

Let’s consider hypothetical figures for three tech companies: TechA, TechB, and TechC.

Company TechA:

P/E Ratio: 20
Annual EPS Growth Rate: 10% (or 0.10 in decimal form)

PEG Ratio = 20 / 0.10 = 200

Company TechB:

P/E Ratio: 25
Annual EPS Growth Rate: 15% (or 0.15 in decimal form)

PEG Ratio = 25 / 0.15 = 166.67

Company TechC:

P/E Ratio: 30
Annual EPS Growth Rate: 20% (or 0.20 in decimal form)

PEG Ratio = 30 / 0.20 = 150

Comparison:

From the figures above:

Company TechA has a PEG ratio of 200.
Company TechB has a PEG ratio of 166.67.
Company TechC has a PEG ratio of 150.

Based on the PEG ratio alone, Company TechC appears to be the most attractively priced relative to its growth prospects. This suggests that, for every unit of earnings growth, an investor would pay the least for Company TechC’s stock compared to the other two.

Important Notes:

Like all metrics, the PEG ratio has limitations. The EPS growth rate is a projection, meaning it’s based on future expectations, which can be uncertain.
A PEG ratio below 1 is often considered undervalued or indicating that the stock’s price is not keeping up with expected earnings growth. Conversely, a PEG over 1 might be seen as overvalued or indicating higher growth expectations.
Comparing PEG ratios across industries might not be as useful due to differing growth expectations. It’s best to compare PEG ratios within the same sector or industry.

For actual evaluations, one would need to gather real data on P/E ratios and growth projections, which can often be found in analyst reports, company guidance, or financial databases.

The Importance of Ratios and Comparisons

Just like how we compare mobile phones before buying, it’s essential to compare financial ratios among companies. For instance, if Microsoft and Apple both have a P/E ratio of 30, but you believe Microsoft has more growth potential, you might lean towards investing in Microsoft.

Wrapping it Up

Reading financial data can initially seem like decrypting hieroglyphics. But once you know what to look for, it becomes a captivating story of a company’s journey, detailing its challenges, achievements, and strategic decisions, all reflected in numbers that offer insights into its future potential.

Introduction

Balance Sheet: A Company’s Financial Snapshot

Income Statement: The Profit and Loss Tale

Cash Flow Statement: Tracking the Cash

Earnings Per Share (EPS): Dividing the Pie

Earnings Yield

Book Value Per Share (BVPS)

The Price-to-Book (P/B)

The Price-to-Cash Flow Ratio (P/CF)

Price to Earnings (P/E) Ratio: The Price Tag

Free Cash Flow Per Share (FCFPS)

Price-to-Free Cash Flow Ratio (P/FCF)

Examples:

Company A:

Company B:

Company C:

Comparison:

Important Notes:

Price-to-Sales Ratio (P/S Ratio)

Examples:

Company X:

Company Y:

Company Z:

Comparison:

Important Notes:

Tangible Book Value Per Share (TBVPS)

Examples:

Company Alpha:

Company Beta:

Company Gamma:

Comparison:

Price-to-Tangible Book Ratio (P/TB Ratio)

Examples:

Company Delta:

Company Epsilon:

Company Zeta:

Comparison:

Price/Earnings to Growth Ratio (PEG Ratio)

Examples:

Company TechA:

Company TechB:

Company TechC:

Comparison:

Important Notes:

The Importance of Ratios and Comparisons

Wrapping it Up