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Description of Magic Numbers for Stock Investors

Building on the success of the original ‘Magic Numbers’ and using wholly new and up to date examples, ‘Magic Numbers for Stock Investors’ looks at key ratios that all investors can use easily to look at the financial health and growth prospects of a company before they buy shares in it. The ratios are described in details, with simple formulas, and help on where to find the data needed to calculate them. There are worked examples, both fictional and actual, in each ‘magic number’ section.

The book follows the same format of ‘Magic Numbers’ (published 2002). But the difference is that it focuses specifically on ratios that are of use to investors in shares. All examples are new and fully updated; around a dozen new ratios have been added; and all worked company examples are different to those in the original book.

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Title Information

ISBN:

9780470821244

Pages:

250 pages

Format:

Hardback

Product Code:

16461

Publisher:

John Wiley & Sons Ltd

Published:

18/11/2003

Edition:

1st Edition

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About Peter Temple

Peter Temple has spent 33 years working in or writing about financial markets. After an 18–year career in fund management and stockbroking, he became a full–time writer in 1988. He has written more than a dozen books about finance and investing, mainly aimed at private investors. His articles appear widely in the financial press. He and his wife live in part of a converted water mill in the English Lake District.

Contents of Magic Numbers for Stock Investors

Foreword
Introduction

Part 1: Valuation "Magic Numbers"

1. Price to Sales Ratio
2. Price to Book Value
3. Enterprise Value to Sales
4. EV/EBITDA
5. Peg Factor
6. Price to Research Ratio
7. Reinvested Return on Equity


Part 2: Income Statement "Magic Numbers"

8. Sales, Earnings, and Equity Per Share
9. Sales, Earnings, and Equity-per-share Ratios
10. Staff Costs as a Percentage of Sales
11. Directors? Remuneration as a Percentage of Net Income
12. Sales and Profit Per Employee
13. "Pro-Forma" Earnings
14. Margins


Part 3: Cash Flow Statement "Magic Numbers"

15. Operating Cash Flow/Operating Profit
16. Price to Free-cash-flow Ratio
17. Free Cash Flow (FCF) to Sales
18. Return on Invested Capital
19. Discounted Cash Flow


Part 4: Balance Sheet "Magic Numbers"

20. Current Ratio and "Acid Test"
21. Debtors Days and Creditor Days
22. Stock Days and Stockturn
23. Gearing
24. Return on Capital Employed
25a. Z-Score Components
25b. The Z-Score

Appendix: Finding the Information
Index