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Description of Magic Numbers

"Magic Numbers goes straight to the bottom line – it′s a terrific reference for all disciplined investors." ––Mario J Gabelli, Chairman, Gabelli Asset Management Inc.



"A concise compendium of the core tools for financial analysis, some modern, most timeless. The various ratios are brought to life with a series of real world examples. Peter Temple′s book provides a valuable resource for financial analysis, for both the professional investor and the private investor seeking a greater understanding of risk and reward in financial markets." ––Desmond Supple, Head of Research, Asia Barclays Capital



"A clear and concise manual for any budding investor. It will help avoid many of the pitfalls of investing. Each step is clearly laid out with examples and explanations of both the pros and cons of each ratio. Lesson 34 ought to state ′knowledge and practice equals few mistakes.′" ––Markus Rosgen, Chief Asian Strategist, ING Barings Asia



"Magic Numbers has an elegant way of presenting and explaining commonly used financial ratios and numbers derived from company statements and accounts. The exposition is careful and clear. It should serve as a very useful compendium and a quick reference for the serious financial market investor." ––Lim Kian Guan, Professor of Finance, Singapore Management University

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Title Information

ISBN:

9780471479246

Pages:

232 pages

Format:

Hardback

Product Code:

14154

Publisher:

John Wiley & Sons Ltd

Published:

19/11/2001

Edition:

New title Edition

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About Peter Temple

PETER TEMPLE was born in the North of England. He is a graduate in economics and statistics from the University of Wales, and is a Fellow of the UK Securities Institute. After an 18–year career as an investment analyst in fund management and investment banking, he turned to full time writing in 1988 as a freelance financial journalist and author.



His articles cover a wide variety of investing topics, and appear regularly in the Financial Times, Investors Chronicle, Shares, International Fund Investment, and in a number of other publications and financial web sites. In addition to Magic Numbers, John Wiley has published several of his other books, including Hedge Funds – The Courtesans of Capitalism, Private Equity and The New Online Investor.

Contents of Magic Numbers

PART ONE: MARKET-BASED RATIOS

Market Capitalization (and Enterprise Value)
Enterprise Value (EV)
Price-Earnings Ratio
Dividend Yield
PEG Factor
Price-Sales Ratio (PSR)
EV/Ebitda
Price/Book Value

PART TWO: INCOME STATEMENT 'MAGIC NUMBERS'

Margins
Interest Cover
Earnings Per Share
Dividend Cover

PART THREE: BALANCE SHEET

Current Ratio and 'Acid Test'
Debtors Days and Creditors Days
Stock Days and Stockturn
Gearing
Price/Cash Ratio
Burn Rate
Return on Capital Employed
Return on Average Equity
Net Tangible Asset Value
Premium/(Discount) to NAV

PART FOUR: CASH FLOW BASED 'MAGIC NUMBERS'

Free Cash Flow
Fixed Asset Spending/Depreciation
Operating Cash Flow/Operating Profit
Price to Free Cash Flow Ratio

PART FIVE: RISK, RETURN AND VOLATILITY 'MAGIC NUMBERS'

Redemption Yield/Risk Free Rate of Return
Internal Rate of Return
Weighted Average Cost of Capital
Discounted Cash Flow
Reinvested ROE
Volatility
Sharpe Ratio

Appendix: Finding the Information