Investing Ratio Formula Suite

WELCOME

TO THE

INVESTING RATIO

FORMULA SUITE

1. Earnings Per Share (EPS)

Before you can understand many of these ratios, it is important to learn what earnings per share (EPS) is. EPS is basically the profit that a company has made over the last year divided by how many shares are on the market. It gets a little more complicated because you don't include preferred shares when calculating — only common shares.

Also, the number of shares outstanding could change throughout the year. But don't worry, this number will be given to you on any financial website.

eps = past year's profits / shares on the market

eps = p / s

Please enter the company's profits earned over the last year (p):

Please enter the number of shares available on the market (s):

2. Price To Earnings Ratio

The price/earnings ratio (P/E) is the best known of the investment valuation indicators. The P/E ratio — though it has its imperfections — is the most widely reported and used valuation by investment professionals and the investing public. A high P/E ratio means investors are paying more for today's earnings in anticipation of future earnings growth.

The basic formula for calculating the P/E ratio is fairly standard. There is never a problem with the numerator — an investor can obtain a current stock price from various sources, and they'll all generate the same dollar figure (which, of course, is a per-share number).

However, there are a number of variations in the numbers used for the EPS figure in the denominator. The most commonly used EPS dollar figures include the following:

Basic earnings per share: based on the past 12 months.

Estimated basic earnings per share: based on a forward 12-month projection.

P/E = current stock price / earnings per share

pe = p / eps

Please enter the current stock price (p):

Please enter the company's eps (eps):

3. Price To Sales Ratio

A stock's price/sales ratio (P/S ratio) is another stock valuation indicator similar to the P/E ratio. The P/S ratio measures the price of a company's stock against its annual sales, instead of earnings. Like the P/E ratio, the P/S reflects how many times investors are paying for every dollar of a company's sales.

price to shares ratio = stock price per share / (net sales (revenue) / average shares outstanding for the year)

ps = p / (r / s)

Please enter the stock price per share (p):

Please enter the amount of revenue (r):

Please enter the average number of shares outstanding for the year (s):

4. Debt-To-Equity Ratio

The debt-equity ratio is a leverage ratio that compares a company's total liabilities to its total shareholders' equity. This is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. A lower number means that a company is using less leverage and has a stronger equity position.

This ratio is not a pure measurement of a company's debt because it includes operational liabilities in the calculation of total liabilities. Nevertheless, this easy-to-calculate ratio provides a general indication of a company's equity-liability relationship.

debt-to-equity ratio = liabilities / equity

r = l / e;

Please enter your total amount of liabilities (l):

Please enter your total amount of equity (e):

5. Dividend Yield Ratio

A stock's dividend yield is expressed as an annual percentage and is calculated as the company's annual cash dividend per share divided by the current price of the stock. The dividend yield is often found in the display of stock quotes for dividend-paying companies. Investors should note that stock quotes record the per share dollar amount of a company's latest quarterly declared dividend.

dividend yield = annual cash dividend per share / current stock price

dy = d / p;

Please enter the annual cash dividend payment (d):

Please enter the current stock price (p):

6. Price to Book Ratio

The price-to-book ratio (P/B) compares a stock's per-share price (market value) to its book value (shareholders' equity). The price-to-book value ratio, expressed as a multiple (i.e. how many times a company's stock is trading per share compared to the company's book value per share), is an indication of how much shareholders are paying for the net assets of a company.

"Price-to-book", provides investors a way to compare the market value —or what they are paying for each share — to a conservative measure of the value of the firm.

price to book ratio = current stock price / current book value per share

p/b = p / b

Please enter the current stock price (p):

Please enter the current book value per share (b):

7. Payout Ratio

The dividend payout ratio tells you how much profit goes out in dividends. This ratio identifies the percentage of earnings (net income) per common share allocated to paying cash dividends to shareholders. The dividend payout ratio is an indicator of how well earnings support the dividend payment.

Dividends are paid at the discretion of management, if the percentage is too high (over about 75%), then the dividend could be cut. If the result is low, then the dividend payment could continue into the future.

payout ratio = dividends per share / eps

por = d / eps;

Please enter the amount of dividends paid per share (d):

Please enter the earnings per share (eps):

8. Current Ratio

The current ratio is a popular financial ratio used to test a company's liquidity — also referred to as its current or working capital position — by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-term assets (cash, cash equivalents, marketable securities, receivables, and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses, and taxes). In theory, the higher the current ratio, the better.

current ratio = current assets / current liabilities

c = a / l;

Please enter the amount of current assets (a):

Please enter the amount of current liabilities (l):

9. Simple Interest Calculator

ending amount = principle × (1 + (interest rate × time))

a = p * (1 + (r * t));

Please enter the principle amount (p):

Please enter the interest rate (as a decimal) (r):

Please enter the amount of time (in years) (t):

10. Compound Interest Calculator

ending amount = principle × ((1 +(interest rate / number of times compounded)) ^ (number of times compounded × time))

a = p × ((1 + (r / n)) ^ (n × t));

Please enter the principle amount (p):

Please enter the interest rate (as a decimal) (r):

Please enter the number of times compounded per year (n):

Please enter the amount of time (in years) (t):