No matter if hobby or professional day traders – a basic stock exchange knowledge must be available in order to be able to successfully trade. And anyone who wants to trade shares needs to know how to find the right stock. This task is how check my reference not easy, but key metrics can help.
General information on share prices
The share price or the rise or fall of the price depends above all on the economic success of a company. The profit and loss account and the balance sheet of the respective company provide information on the economic success. This is then used to calculate certain key figures, which in turn provide information on earnings and financial strength. Of course, the current when visit your url valuation of the company on the stock market is also important. In doing so, published business results are quickly “priced” in the stock exchange, which is why there are positive price increases. However, in order to be able to estimate the value of a share more closely, the following key figures are of great importance.
Equity ratio – EKQ
The equity ratio (EKQ) provides information on the financial and economic soundness of a company. EKQ is the share of equity in total capital. Here, the higher the EKQ, from check out your url the more solid the financial situation of the company. According to the experts, an EKQ of more than 30 percent is sufficient. An EKQ is ideal if it is more than 50 percent.
Price-to-book ratio – KBV
The value-to-market ratio (KBV) shows the equity value according to the balance sheet (book value) in relation to the market value of the equity (price on the stock exchange). The higher the KBV, the higher the probability discover here it that the economic future of a company will be positive. Ideal is a KBV of 1.0.
Price-earnings ratio – P / E
The price / earnings ratio (P / E) shows the ratio of the share price to the share profit, which allows the share to be compared and assessed with others. Here, a low P / E ratio is much better than a high P / E ratio. In the case of P / E, the accompanying circumstances must always be taken into account. It is also important that the P / E ratio is always compared to the industry. This can be used to determine whether a stock is too expensive or too cheap.
Price-to-cash via back flow ratio – KCV
The price-cash-flow ratio (KCV) shows the relationship between price and expected cash inflows. For this reason, this figure is often used for companies that are currently not generating any profits. Here the following applies: The higher the KCV, the more expensive the share.
Price-to-sales ratio – KUV
The price-to-sales ratio is used to assess the company’s market value using the for great post to read turnover of the respective company. The share price is divided by sales per share. Again, only a comparison with the industry should take place. There is no generally valid statement as to which level of KUV is considered to be really good or fair.
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Earnings before Interest and Taxes – EBIT / Earnings before Interest, Taxes, Depreciation and Amortization – EBITDA
EBIT (earnings before taxes and interest) and EBITDA (profit before taxes, interest and depreciation) are key figures which provide information on the earnings power of a company. Both key figures are published in the quarterly report and used in the international financial statements. They show the results of the operations of a company. Here, the higher the values are, the higher the profits from the operations.
To calculate the dividend yield, the current share price must be divided by the dividend paid per share. This key figure is mainly used for why not find out more their the dividend-based investment strategy. The following applies: The higher the ratio, the higher the capital that is invested in the share. It should be noted, however, that there is still no guarantee that a company