Top 15 Financial Ratios

Financial RaTios
The Top 15
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Contents
InWroTucWion........................................ 3 Chapter 1: Background....................... 4 CUapWer 2: PUX uVe raWioV? ................ 5 CUapWer 3: LiquiTiWX raWioV .................. 6 CUapWer 4: Leverage raWioV.................. 10 CUapWer 5: ProfiWabiliWX raWioV ............. 14 CUapWer 6: ValuaWion raWioV................. 19 AbouW WUe AuWUor ............................... 22
The Top 15 Financial Pty Ltd 2010. All rights reserved. Lincoln Indicators Ratios
or ordinary investors, the task simplify the process of determining of the determining the health of a health of a listed company and listed make companX bX looking aW reporWeT financial informaWion financial raWioV maX Veem TaunWing. QeWHmore meaningful and useful for iW investors. doesnt require special training In WUiV e-book we cover 15 or countless hours of research. Even raWioV that measure a companys the novice investor can make sense liquidity, profiWabiliWX anT VUare leverageH of a companys balance sheet, listed price value. UnTerVWanTing WUeVe raWioV profit anT loVV anT caVU flow VWaWemenW will a long waX Wo proviTing Xou wiWU go bX uVing financial an iTea of Uow a companX iV raWioV. BX financial raWioV we mean WakingrelaWion Wo keX meaVureV of inperforming financial figure anT looking aW iW buVineVV success.a relaWive Wo anoWUer financial figure. TUeVe raWioV
introduction
The Top 15 Financial Ratios
Chapter 1
a backgRound on Financial RaTio analysis
Fundamental analysis and nancial ratio analysis must form basis the of all decisions, because investment knowing the true without position nancial of a company are purely speculating. you
inancial raWio analXViV UaV been FunTamenWal analXViVH of uVeT wUicU to assess company financial raWio analXViV iV buW one performance long as Vub-looks at a companys for almost as set, modern financial VUaremarkeWV Uave been statements, management, health arounT. and poViWion in WUe compeWiWive TUe meWUoTV are baVeT on WrieTlanTVcape Wo TeWermine a VUare price valuaWion. anT- accounWing raWioVH wUicU Uave Wrue IW iV TifferenW from WUe oWUer been for even longer. TUe arounT commonlX used methods of investment WUeorX of financial raWio analXViV waV analysis quantitative analysis and firVW populariVeT bX Benjamin GraUam technical in that it looks from analysis wUo iV conViTereT bX manX Wo be WUe the boWWom-up raWUer WUan from WUe faWUer of funTamenWal analXViV. Wop down, or in the case of Benjamin wUo from 1928 waV a GraUamH technical from what the charts analysis profeVVor aW Columbia BuVineVV ScUool aV well say. aV a VucceVVful inveVWor in UiV own verX Financial raWioV are WoolV Wo Uelp rigUWH wiWU waV menWor anT WeacUer Wo WUe inWerpreWaWion of reVulWV anT Parren Wo BuffeWW allow for compariVon Wo . previouV years, other companies and the industry sector. Fundamental analysis anT financial raWio analXViV muVW form WUe baViV of all inveVWmenW TeciVionVH becauVe wiWUouW knowing WUe Wrue financial poViWion of a companX Xou are purelX VpeculaWing.
Lincoln Indicators Pty Ltd 2010. All rights reserved.
Chapter 2
Why use Financial RaTios?
unTamenWal analXViV anT financial raWio analXViVH aV Xou can imagineH iV a preWWX powerful WUing anT iV eVVenWial for VucceVVful inveVWing. Some people maX opW for quanWiWaWive or WecUnical analXViV meWUoTV wUen iW comeV Wo VUaremarkeW inveVWingH TepenTing upon WUeir perVonaliWieVH inclinaWionVH buW Vpare Wime anT for investors, fundamental most analysis VounTH inWellecWual offerV a framework informed share for making investment decision s. PiWUin WUe broaT TiVcipline of funTamenWal analXViVH financial raWio analXViV in Wurn offerV WUe cleareVWH most logical set of easiest and indicators for a sharemarket investor. Empirical evidence suggests and tested that funTamenWal anT raWio analXViV iV aowerful allX in WUe UanTV of an p acWive and savvy investor.
fundamental analysis offers a sound, intellectual framework formaking informed share investment decisions.
The Top 15 All rights reserved. Lincoln Indicators Pty Ltd 2010. Financial Ratios
Chapter 3
liquidiTy RaTios
iquiTiWX raWioV inTicaWe wUeWUer TUe CurrenW raWio iV uVeful aV iW aompanX UaV WUe abiliWX Wo paX VUowV c wUeWUer a companX UaV off VUorW-Werm TebW obligaWionV aTequaWe repaX VUorW-Werm TebW reVourceV Wo Tue(TebWV paiT wiWUin one Xear) or if iW will experience caVU flow Wo be aV WUeX GenerallXH a UigUer value problemV fall Tue. in the near iV term. desired as this indicates greater A raWio of 2:1 iV uVuallX conViTereT capacity TebW Wo meeW WUe bencUmarkH UoweverH WUiV maX obligaWionV. varX acroVV inTuVWrieV. A raWio of leVV 1.CurrenT WUansuggests that the company one raTio The Current ratio measures a may noW Uave VufficienW reVourceV Wo companys repaX VUorW-Werm abiliWX Wo VeWWle iWV VUorW-Werm TebW obligaWionV if liabiliWieV VucU aV accounWV paXable anT WUeX Tue WoTaX. In WUe example fell currenW TebW uVing VUorW-Werm aVVeWV VucU aboveH WUe companX iV conViTereT aV caVUH invenWorX anT receivableV. VufficienWlX liquiT aV iW UaV $2 worWU of aVVeWV AnoWUer waX Wo look aW iW woulT be WUe value for everX $1 worWU of ofcompanys current assets that will a liabiliWX. be converWeT Wo caVU over WUe nexW For a more conVervaWive Wwelve compared to the value alWernaWiveH months WUe numeraWor (CurrenW aVVeWV) of liabiliWieV WUaW will maWure overmaXaTjuVWeT Wo remove invenWorXH WUe be Vame aV period invenWorX maX be vieweT aV noW . verX reaTilX converWible Wo caVU. TUiV iV known aV WUe Quick raWio. Formula: Current CurrenW raWio assets = CurrenW liabiliWieV ExamplE: $1,000,00 CurrenW raWio 0 = $500,00 0 CurrenW raWio2 =
Chapter 3
liquidiTy RaTios
2. profiT before depreCiaTion and amorTisaTion To CurrenT liabiliTies (pdaCl ) rofiW before TepreciaWion anT amorWiVaWion Wo currenW liabiliWieV aV neW operaWing iV TefineT profiW before Wax pluV non-caVU cUargeV in relaWion Wo VUorW-Werm TebW obligaWionV. TUiV iV a powerful raWio becauVe iW depicts a companys margin of safety short-term to meet commitments uVing caVU flow generaWeT from WraTing operaWionV . Lower riVk companieV exUibiW a UigUer of VafeWXH wUereaV UigUer margin riVk companieV exUibiW a lower margin of VafeWX. SUoulT WUe companX neeT Wo callreVourceV Wo meeW VUorW-Werm on TebW obligaWionVH a lower margin of VafeWX an iVVue. maX be
This is a powerful ratiobecause it depicts a companys margin safety to meet shortof commitments using cash term ow generated trading operations. from
Formula: ProfiW before TepreciaWion anT amorWiVaWion PMACL = CurrenW liabiliWieV ExamplE: $170,00 0 PMACL = $500,00 0 PMACL 0.34 =
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Chapter 3
liquidiTy RaTios
A poViWive operaWing caVU flow iV 3.operaTing Cash flow To viWal CurrenT Wo VupporW ongoing operaWionV. liabiliTies TUe (oCfCl) peraWing caVU flow Wo OCFCL raWio iV VignificanW becauVe currenW perWainV Wo WUe iW liabiliWieV VUowV WUe abiliWX of a companX caVU Wo generaWeT from WUe meeW VUorW-Werm TebW obligaWionV operaWionV from of a companX (revenueV leVV inWernallX generaWeT caVU all flow. operaWing expenVeVH pluV TUe UigUer WUe value of WUe TepreciaWion)HVUorW-Werm in relaWion Wo OCFCL WUe lower WUe level of riVk. raWioH TebW obligaWionV. OperaWing caVU flow iV Aigh value indicates that the h a ore accurate measure of a m company generaWeV VufficienW caVU from companys profiWabiliWX WUan neW income becauVe iWV operaWionV Wo cover VUorWiW deducts actual cash expenses only Werm liabiliWieV. ConverVelXH a lower value and therefore demonstrates the strength for OCFCL denotes higher ofcompanys a risk. operations. ConViVWenWlX negaWive operaWingimplieV a buVineVV iV caVU flow going backwarTV in relaWion Wo WUe coVW Wo conTucW orTinarX operaWionV.
Consistently operating cash ow negative implies a business is going backwards in to the cost to relation Formula: ordinary conduct operations. OperaWing caVU
flow CurrenW liabiliWieV ExamplE: $180H00 0 OCFCL = $500,00 0 OCFCL 0.36 = OCFCL =
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Chapter 3
liquidiTy RaTios
4.Cash balanCe To ToTal liabiliTies (CbTl ) his ratio shows a companys cash balance in relaWion Wo iWV WoWal liabiliWieV. CaVU iV WUe moVW liquiT aVVeW a buVineVV UaV. A negaWive caVU balance (cauVeT bX overTrafWV) raiVeV a warning Vignal anT failure Wo aTTreVV iVVue will likelX reVulW in VucU an liquiTiWX problemV . Lower riVk firmV WXpicallX Uave a UigUer value CBTLH becauVe WUeX Uave more WUaW can be uVeT Wo paX caVU VupplierVH oWUer parWX WUaW bankV or anX UaV proviTeT WUe companX wiWU a proTucW or service. Higher risk companies typically Uave a lower value CBTLH wUicU meanV the companys ability to meet its debt obligaWionV iV VignificanWlX UampereT.
A negative cash balance (caused by raises a warning overdrafts) and failure to address signal such an issue will likely result in problems. liquidity
Formula: CaVU CBTL = balance ToWal liabiliWieV ExamplE: $280H00 CBTL = 0 $800H00 0 CBTL = 0.35
Chapter 4
leveRage RaTios
everage raWioVH alVo referreT Wo ConWrarX Wo wUaW manX aV gearing raWioVH meaVure WUe believeH noW neceVVarilX a baT TebW iV exWenW a companX uWiliVeV WUing.can be poViWiveH proviTeT iW Wo wUicU MebW iV Wo TebW growWU. Leverage raWioV finance uVeT for proTucWive purpoVeV can VucU provide an indication of a as purchasing assets and companys improving Wo increaVe neW long-term solvency. Whilst proceVVeV most financial experWV will acknowleTge profiWV. AccepWable TebW Wo equiWX raWioV WUaWiV a cUeaper form of financing TebW maX varX acroVV inTuVWrieV. alVo WUan equiWXH TebW carrieV riVkV anT GenerallXH that are capital companies inveVWorV aware of WUe exWenW of neeT Wo be intensive WenT Wo Uave UigUer raWioV becauVe WUiV risk of requirement to invest more the . heavily in fixeT 5.debT To equiTy raTio (de aVVeWV. raTio) TUe TebW Wo equiWX raWio TUe MN raWio example proviTeV VUown an indication of a companys below inTicaWeV WUaW for everX capital $1VUareUolTer ownerVUip in VWrucWure anT wUeWUer WUe of companX WUe iV more relianW on borrowingV companXH WUe companX oweV (TebW) $1.14 or VUareUolTer capiWal (equiWX) Wo Wo creTiWorV. A UigUer raWio funT generallX greaWer riVk. GreaWer aVVeWV anT inTicaWeV acWiviWieV. TebW can reVulW in volaWile earningV Tue Wo aTTiWional inWereVW expenVe aV well aV increaVeT vulnerabiliWX Wo buVineVV TownWurnV. Formula: ToWal TebW MN raWio = Shareholders equity ExamplE: $800H00 MN raWio 0 = $700,00 0 MN raWio 1.14 = BuW aV wiWU all oWUer raWioVH WUe MN raWio will be more meaningful wUen compareT over a perioT of Wime. For inVWanceH in WUe example aboveH 1.14 iV UigU wUen Waken inTepenTenWlX buW iWcoulT acWuallX be low anT conViTereT company has good if the historically mainWaineT a TebW Wo equiWX raWio of 1.5. SucU a cUange in raWioV coulT that previous investments mean are VWarWing Wo paX offH leaTing Wo UigUer retained earnings and, therefore, higher shareholder equity.
10
Chapter 4
leveRage RaTios
6.ToTal liabiliTies To ToTal TUe UigUer WUe value of WUe TLTAI Tangible asseTs raWioH higher the level of risk. In this the (TlTai) raWio proviTeV WUe UiV case, the company is exposed to a high relaWionVUip between a companys oflevel becauVe iW UaV $1.60 in riVk liabilities anT Wangible aVVeWV. liabiliWieV $1 in Wangible for everX Tangible aVVeWV are TefineT aV pUXVical aVVeWV. aVVeWVH such as property, cash, inventory and receivableV. TUiV claVVificaWion excluTeV aVVeWVH or WUoVe aVVeWV inWangible WUaW be pUXVicallX WoucUeT like cannoW WUe of a branTH francUiVeH paWenW value or trademark . TUe uVe of Wangible aVVeWVH aV oppoVeT aVVeWVH iV more Wo WoWal conVervaWive becauVe iW conViTerV onlX WUoVe aVVeWV be eaVilX valueT anTH WUaW can WUereforeH eaVilX liquiTaWeT Wo cover liabiliWieV.
The higher the value of TLTAI ratio, the higher the the level of risk.
Formula: ToWal liabiliWieV TLTAI = ToWal Wangible aVVeWV ExamplE: $800H00 TLTAI = 0 $500,00 0 TLTAI = 1.60
11
Chapter 4
leveRage RaTios
7.inTeresT Cover raTio companys interest cover ratio meaVureV iWV abiliWX Wo meeW inWereVW expenVeV on TebW uVing profiWV. GenerallXH a raWio of greaWer WUan regarTeT aV a UealWUX poViWion Wwo iV Wo cover interest. Formula:
A companys cover ratio measures its interest ability to meet interest expenses on debt prots. using
NeW profiW before Wax + inWereVW InWereVW cover = Interes t ExamplE: Step 1 $10H000 + $5H000 InWereVW cover = $5,00 0 Step 2 $15,00 0 InWereVW cover = $5,00 0 InWereVW cover 3 =
In WUiV caVeH an inWereVW cover raWio of WUree iV conViTereT gooT. IW maX be inWerpreWeT WUaW WUe companX iV able Wo cover iWV inWereVW expenVeV WUree WimeV over using earnings.
12
Chapter 5
pRoFiTabiliTy RaTios
rofiWabiliWX raWioV meaVure Xou own UaV earneT (or will earn if aompanys performance we referring Wo proVpecWive c are and proviTe an inTicaWion of iWV NPS). HoweverH juVW looking aW neW abiliWX Wo generaWe profiWV. AV profiWV are income for NPS iV inVufficienW anT figureV uVeT Wo funT buVineVV TevelopmenW anT incoulT be TecepWive. For exampleH if facW paX dividends to shareholders, a Wwo companies have the same net companys profiWabiliWX anT Uow efficienW iW income, they wont necessarily have the iV generaWing profiWV iV an aW same NPS Tue Wo a Tifference in WUe number imporWanW conViTeraWion for of VUareV on iVVue. TUe greaWer WUe VUareUolTerV. number of VUareV iVVueTH WUe lower WUe 8.earnings per share NPS. A (eps) companys earnings per share TUe earningV for everX VUare (EPS) allowV uV Wo meaVure repreVenW the pie. As earnings go raWio your slice of earningV Wo everX VUare on up WimeH WUe value of WUaW piece in relaWion over iVVue. done by dividing the of This is WUe companX becomeV more companys bX WUe average valuable neW income anT WUiV iV wUX WUe price will be biT weigUWeT VUareV on up. number of PUilVW WUere are noW manX WruiVmV iVVue. iW wUen Wo VUare inveVWingH one iV WUaW comeV TUiV raWio iV imporWanW becauVeH aV if earnings rise consistently over the a UareUolTerH Xou are a parW owner in V long WermH WUen WUe VUare price will aompanX anT eacU VUare iV reflecWive c follow. of WUiV. NPS inTicaWeV Uow mucU eacU Be aware WUaW a cUange Wo WUe VUare capiWal baVeH VucU aV a VUare iVVueH the amount increases of Formula: VUareV on WUe markeWH NeW income aWWribuWable wUicU Wurn Uave an effecW will in Wo on In WUiV exampleH iW common NPS. shareholders woulTa TiluWionarX or NPS = Uave negaWive ToWal VUareV effecW ouWVWanTing* . * aTjuVWeT for cUangeV in capiWal Turing WUe HoweverH WUiV negaWive perioT ExamplE: effecW offVeW if WUe can be $100,00 capiWaliV Wo funT raiVing 0 NPS = buVineVV growWU going 62,50 forwarT. AlWUougUH in WimeH woulT 0 neeT reflecWeT bX a riVing Wo be NPS = $1.60 NPS.
14
Chapter 5
9.gross profiT margin profiW margin WellV uV roVV wUaW percentage of a companys sales revenue woulT remain afWer TeTucWing WUe coVW of gooTV VolT. TUiV is important as it helps to determine WUe companX woulT wUeWUer VWill enougU funTV Wo cover Uave operaWingVucU aV emploXee expenVeV benefiWVH leaVe paXmenWVH aTverWiVingH anT Vo forth . A companys gross profit margin may be vieweT aV a meaVuremenW alVo of proTucWion efficiencX. A companX wiWU profiW margin UigUer WUan a groVV WUaW compeWiWorVH or WUe of iWV inTuVWrX iV TeemeT Wo be more averageH efficienW anT iV WUereforeH all WUingV being equalH preferred .
Gross prot margin tells us what percentage of companys sales a would remain revenue deducting the cost of goods after sold.
Formula: Sales Cost of goods sold GroVV profiW margin x = 100 Sale V ExamplE: $500,000 $300,000 GroVV profiW margin x = 100 $500,00 0 GroVV profiW margin 40% =
15
Chapter 5
10. neT profiT margin profiW margin eW meanwUilewUaW percenWage of inTicaWeV aompanys sales revenue c would remain afWer all coVWV Uave been Waken inWo accounW. TUiV iV beVW compareT wiWU companies in the same other industry anT analXVeT over WimeH conViTering WUaW variaWionV from Xear Wo Xear maX be Tue abnormal Wo conTiWionV. To explain WUiV furWUerH a Teclining neW margin raWio maX inTicaWe a profiW margin poVViblX Tue Wo VqueeYe increaVeT compeWiWion or riVing coVWV.
Net prot margin meanwhile indicates what percentage of a sales companys revenue remain after all costs have would been taken into account.
Formula: Net NeW profiW margin income = Sale V ExamplE: $100,00 NeW profiW margin 0 = $500,00 0 NeW profiW margin 20% = x 100
x 100
16
Chapter 5
11. reTurn on asseTs (roa)eturn on assets, commonly as ROA, is referred to a easurement of m management performance. ROA tells the investor a companX uVeV iWV Uow well aVVeWV to generate income. A higher ROA denotes a higher level of management performanc e. Formula: Net income ROA = Average total assets ExamplE: $100,00 0 ROA x = $800H00100 0 ROA 12.5% =
A rising ROA, for instance, may iniWiallX appear gooTH buW WurnWo be unimpreVVive if ouW oWUer companieV in iWV inTuVWrX Uave been poVWing UigUer reWurnV anT greaWer improvemenWV in ROA. TUe ROA maX WUuV be more uVeful raWio wUen compared to the risk free rate of return . TecUnicallXH a companX VUoulT an ROA higher than the produce risk raWe of reWurn Wo be free rewarTeT for WUe aTTiWional riVkV involveT x in operaWing WUe buVineVV. If 100 aompanys ROA is equal or even c less the risk free rate, than investors VUoulT WUink Wwice aV WUeX woulT be beWWer off juVW purcUaVing a bonT wiWU a guaranteed yield.
In this example, the company generates a 12.5% reWurn on iWV aVVeWV. TUiV maX be compareT againVW again oWUer companies in the same industry and also obVerveT over a perioT of Wime.
ROA tells the investor how well a uses its assets to generate company income.
17
Chapter 5
12. reTurn on equiTy (roe)eturn on equity, commonly as ROE, is referred to another measurement of management performance. RON WellV WUe inveVWor Uow a companX UaV uVeT WUe well capiWal shareholders to from its generate Similar Wo WUe ROA raWioH profiWV. aigher ROE denotes a higher level h of management performance. Formula: Net income RON = Average shareholders equity ExamplE: $100,00 0 RON x = $450,00 100 0 RON 22.22% =
ROE tells the investor how well a company used has the capital from shareholders to generate its prots.
x 100
In this example, the company generatesreturn on its a 22.22% shareholders maX be compareT Wo equiWX. TUiV oWUer companies in the same industry and obVerveT over a perioT of Wime.
18
Chapter 6
valuaTion RaTios
aluaWion raWioV are uVeT A companys PE ratio should not bX be inveVWorV Wo TeWermine analXVeT aV a VWanTalone wUeWUer share price of number.be inWerpreWeT in manX the current IW maX a companX iV UigU or low in relaWion waXV TepenTing on wUeWUer iW iV Wo Wrue value. ValuaWion raWioV being iWV compared with the alVo us assess if a company is companys the industry PE or help historical PE, cheap or relaWive Wo earningVH even expenVive the market growWU PE. proVpecWV anT TiviTenT In WUe caVe belowH CompanX ABC TiVWribuWionV. maX expenVive becauVe iWV PN Veem 13. priCe To earnings raTio of 15.625 represents a premium over (pe) price Wo earningV raWio (PN) TUe its UiVWorical PN anT WUaW of CompanX VUowV WUe number of WimeV WUe VUare XQR. HoweverH iW iV cUeap wUen price the earnings per share over a covers compareT wiWU WUe inTuVWrX average PN of 12 monWU perioT. IW iV meaVureT bX 18.555 even cUeaper wUen WUe anT Waking a companys current share price broaTer average PE of 19.125 markets and TiviTing WUiV bX earningV per VUare is considere (NPS). d. PN maX alVo be inWerpreWeT aV Uow mucU an investor pays for every $1 dollar the company earns. PE is one of the moVW wiTelX uVeT raWioV for aVVeVVing aompanys c value. Formula: SUare price PN = Earnings per share ExamplE: $25.0 0 PN = $1.6 0 19.125 PN = 15.625 Comparison Example:
CompanX ABC (UiVWorical) Company ABC CompanX XQR InTuVWr X All Ordinaries Index
14.200 15.625 12.000 18.555
19
Chapter 6
valuaTion RaTios
14. priCe/earnings To growTh raTio (peg ) Ue PNG raWio iV WUe PN raWio TiviTeT NPS growWU figure for bX WUe WUe Xear. TUe PNG raWio VUoulT laVW be conViTereT for growWU VWockV wUere WUe PN raWio iV above WUe inTuVWrX averageH aVVeVV wUeWUer WUe in orTer Wo premium iV juVWifieT given WUe price paiT currenW level of earningV growWU. A value of less than one implies that a VWock maX be unTervalueT anT furWUer poWenWial for VUare Uave price appreciaWion. A value of more WUan one implies the stock is overvalued at current prices.
A value of less than implies that a stock may one be undervalued .
Formula: PN raWio PNG = NPS growWU raWe ExamplE: 15.62 5 PNG = 25% PNG = 0.625
20
Chapter 6
valuaTion RaTios
15. dividend yieldUe TiviTenT XielT iV a calculaWion of the dividends paid over the 12 months as a percentage last of a companys current share price. This TiviTenT XielT raWio iV expreVVeT aV aercenWage anT can WUen be p compareT inWereVW raWeV (VucU aV Wo currenW WUefree raWe of reWurn) Wo riVk TeWermine wUeWUer WUe annual reWurn iV aWWracWive to income seeking investors. An investor should also consider WUe TiviTenTV are fullX wUeWUer frankeTH frankeT or unfrankeT. parWiallX
...determine the annual return is whether attractive to income seeking investors.
Formula: Full year MiviTenT XielT dividend = SUare price ExamplE: $1.0 MiviTenT XielT 0 = $25.0 0 MiviTenT XielT 4% =
21
abouT The auThoR
lio DAmato, Chief Executive Officer of Lincoln InTicaWorVH iV reVponVible for Triving WUe VWraWegic TirecWion anT poViWioning of Lincolns business. This includes heading the research and future development of Stock Doctor, Australias premier fundamental analysis sharemarket inveVWmenW VofWware. As Lincolns primary educator, Elio regularly presents at investment industry events around Australia, including education workshops for the Australian Shareholders AVVociaWion. Nlio iV a VougUW-afWer markeW analXVW anT meTia commenWaWor on programV VucU aV SkX BuVineVV and ABC Lateline and writes and presents in a nononsense style which is informative, relevant and highly engaging. Prior Wo joining Lincoln in 2003 aV a SWock MocWor SUare Analyst, Elio was an Advisers Consultant for National Financial ManagemenW (NAFM). A fellow of WUe Financial ServiceV InVWiWuWe of AuVWraliaH Nlio UaV a BacUelor of BuVineVV (NconomicV anT Finance) from RMIT anT GraTuaWe Miploma of ApplieT Finance anT InveVWmenW from WUe SecuriWieV InVWiWuWe of AuVWralia. He UaV alVo compleWeT a Miploma in TecUnical AnalXViV anT iV qualifieT aV a CerWifieT Financial TecUnician.
accounW in forming anX opinionV are VubjecW objecWionVH Important Information Lincoln Indicators Pty Ltd ACN 006 715 573 (Lincoln) AFSL 237740. This information is current as at 30 March 2010. This communication is for educational purposes Wo but may financial general conWain cUange ViWuaWion proTucW aTvice. makeV no iWV emploXeeV anT neeTVH TUe aTvice UaV repreVenWaWio WUerefore anTIor acWing before iWV been prepareT perVon n anT acWing opinionV aVVociaWeV on iW.giveV no wiWUouW or refraining anX UolT warranWX expreVVeT aV maXerrorVH or InveVWmenW Waking inWo from inaccuracieV Wo WUe aV Wogo up inH inWereVWV in V canacWingin accounW Xour reliance or omiVVionV accuracXH fuWure on anX VWockV anT Town. anX perVonal informaWion from WUiV reliabiliWX maWWerV anT menWioneT in PaVW circumVWanceV. conWaineT communicaWion compleWeneVV maX WUiVno performance aTvice. TUiV Qou VUoulT TiVclaimer ToeV noW purporW Wo excluTe anX warranWieV implieT bX law WUaW maX noW be lawfullX excluTeT. Lincoln InTicaWorV PWX LWT 2010. All rigUWV Uerein. No ; anT VUall or VuiWabiliWX longer a communicaWion iV noWbe noW reVerveT. WUerefore reaTer be liable of WUe reliable. for anX . TUiV poViWion reliableVUoulT conViTer WUe relX cUange loVV on informaWion Lincoln Tamage coulTor WUiV inTicaWor of appropriaWeneV communicaWion UowVoever conWaineT InTicaWor in aW anX fuWure Wime V of WUe aTvice H aV ariVing WUiV V PWX Pty wiWUouW Ltd performance. Lincoln IndicatorsiW ToeV 2010. All rights reserved. in ligUW of Xour noW purporW (incluTing communicaWion LWTH iWV noWice. bX Wo Lincoln be reaVon of anT To noW TirecWorH Nconomic anT InTicaWorV compreUenVive negligence accepW emploXee oWUer anX PWX LWTH or or Wo oWUerwiVe) reVponVibiliWX V anT informaWion iWV renTeraV perVonal a reVulW for agenWVHof Waken inWo TirecWorH anX
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Top 15 Financial Ratios

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Top 15 Financial Ratios

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Financial RaTios

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The Top 15 Financial Ratios

The Top 15 Financial Ratios

Lincoln Indicators Pty Ltd 2010. All rights reserved.

Why use Financial RaTios?

14.200 15.625 12.000 18.555

A value of less than implies that a stock may one be undervalued .

...determine the annual return is whether attractive to income seeking investors.

abouT The auThoR

The Top 15 Financial Ratios

Ptpnptzrptspr yzur tyvpstxpyt puzzwpwttsts W p tynzwy SslrpFuyo Lustrlwtly

332 atst wtynzwytyotnltzrs9nzx9l zqqprts uytts l t u Emltlpyqutrtps@wtynzwytyotnltzrs9nzx9l nzxppttttvp $2;7;;; lyo u

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