Key figures – How to Analyze Financial Statements

The raw data and figures in the consolidated financial statements provide useful information and a good starting point, but if they base their investment decisions, the following financial ratios calculated
Earnings per share -
The profits of an enterprise in itself is not a good indicator of the financial health of the company or the shareholder. However, profits and the total number of shares outstanding more useful measure. This measure is less than the earnings per share (EPS). It will be divided by net income divided by the total number of outstanding shares.
For example:
Uber Tech Company had a net profit of 20 billion U.S. dollars and has 400,000 shares outstanding. Uber Tech is EPS = (20000000 / 400000) = 50
to the EPS insulation can not say much, but when you decide how their peers Uber Tech this measure, the comparison would be helpful.
Ratio Awards -
This is the reason often cited in the financial media, when discussing a particular action. The price-earnings ratio (P / E) is calculated by dividing the share price by the earnings per share.
Pointed to the example above, if the population would Uber Tech sold for $ 100 P / E = 100/50 2. P / E tells you how investors are paying more for the profit of the company. There are several ways to interpret this relationship. If a company has a high P / E of the population is considered to be expensive or very expensive. Similarly, a low P / E ratio means the company has become more visible and is still much room for growth. However, these two observations do not know until it is validated by comparing the P / E for the sector P / E, or with their colleagues in the society. Do not use any measure for a decision. This ratio should be used with other with a view to the ultimate decision as possible.