FR) RAHUL SAXENA NiSM RESEARCH ANALYSTS CHAPTER 4 (Part 3) Hand Notes || —™N [sare it for lattergL TeRmaoLogy oF Eaurty Face VALUE . Face Value ues to tre nominal value om» pox value Of Jrraneton chs tuum , f a bond of a clock. tt vepseseuks dur_value Of te tnshyumenk as stated on ie coutifreate , reg oud ess % as Current Moke price: For Bonds, tu. ore value & We amgunt mony nod th bovd niuey promises to to tha te bowd raldey ot moluuily . tt @ also Me anont On whlch Mu prealic inteyest payments , known a Coupon Pogments . ane based. For Stocks, the pace velue 4 aE symbolic ond reprints We nomined value aasigned to tu tock, 04 te tine Y wwe . ty practice, sks ous ie traded ot prices above oy below oi foc velve in te second manket, bowed on sup aud Aemand dynamics, comp amy Peformance, and other cia Poe velue important foo various , dacluding deteomining tn Pedenption yale4 bounds ot ily and Calculate Me iwitiah capitalization of & Company's S4ntk,- [owwer A rn ok Ae ane tive mouket volue 4 Hs notin , whith do ing rence by factor beyoud He nenmina yolue* Book Vvatve Bock Value, aloo known as over $10 billion market Coplta lization Mid cap> morket italization ean between ¢2 billion and $10 biUion. Small ca > Market capitalization below $2 bition. Markel capt ion iy wld dig oe woe wufaye wy flame, wile wie oe ae tue aint sige ce ublit toadeaENTERPRISE VALUE Coleapprscs value (EV) 2 0 meme ie lal volue, taking cuto account a“ as ria omd dot domponsufs , tu theoretical takeover ce a o assuming. thot a4 1 apy essa comp debt ond Ohne eee ENTERPRISE _ VALVE ee con Wm of QW the Torod market rors Oulsjoudoy value of sat obligations co ath cufshabig Total omoumt ef; cash on howd ond Wighly Liquid ree Caluapriee vale provides os mare Covers hunive menor of es value Compaued to einer cprellgaion atone. oa Ut aecounte ee Obl RAcicasc mes cer can TH to aston worl ey finowmeint amalyste Py Omens the abfractiventss of an cieotonet- apepertunity eu to compare the, nslative valuakons ay compauses ee ee wdentruprise voluw pot woefut wm situakions such o mergers acquisitions , Ohne he ya a veer to aasumne te target Companny's debt ond dsner Labi litres. se Velue wo 4 Valuable webfc wn _feaounia analysts , prow cnsights and ds tuto wo CLAS total capttol Shuctue - EARNING ¢ HPSTORICAL , TRAPLENG ond PORWARD HTSTORICAL EARNPNGS * o Mistosice! Cornt & om Co 6 Gite cided! ebrercte toch — wate actual camed aur ha eo oo a oplipie puiod uot Pe ded casual vnilane ngs provide enon! ese wa ie peat Caled a at septs = = a - fer woluating, a pact pexoomance and compoefs poronctas oarTRAPLING BARNDNGS Touhy Canni’ , ao known ao foatung, fe CTTM) aomings, Ate ti sum Of a co 2 dusinge 0 the past twelve mourns. ee Tealling. eaunt icle oc weore rue a eee aa ae i f i i Ormanee oo cord to atehetoal iaaatege fore vila posed. ey) Ont Often wood! by Reenter qu CY Ss Cyusrent- oui, Powe one preeen Giy > Mw were wurve ¢ po comprehenstve mi ee d abt li “ies yang hee onde NY oe FORWARD BARNINGS Pooword Earmnt ay eT ufure anu ace a Mealy fokenoh and oodbpucant ADU. provide, eusights Cato market fons onding. o1 F fe propriety bd rst pl _ Prrwonsl comings an often on az models ancl tons 77 analysts -Ones tu atfecrctiventss On wnreotrent- sppodtuniG avd to oinalie a compouy's tubjinwe value. > belb tnwotes gage market Copectations Qa 00. s dufure earnings 7 and gina pla tft - 7 EARNING PER SHARE (£Ps) 2 Eonulng. Poy Shaye wm a franctal mebic. thot repress the pext’on 44 anaes ppc aoroted t) each Outstanding shave Of Common stock. D+ io coleuloted by Se We Co Ws nef encome boy te total niunbey 4 oustanding shoes. EPs = Net Income. Total Numloey 04 Outstanding shaves hf a an _baporfaante menue 6 compory’s HoloUlity amd eoqnings potential Tt powdes , how much profit ia generated per shone % commen eee - aavertos to anes {ue Co 'g fiacvetol poyormmune 6 0 pe-chaw boasts EPo jin comma seo! Unveoto2s md omalysts wn financial osha st . Valuation ™ededle , andond Laver tunent- Cleefsvon -makiing - Te Wetps — enveatres gauge a Col te Cosuni poeutiaf aol compete. tit Cerone wilt, _oHer Courpounies Cy te Sow DIVIDENDS PER SHARE Cpps) Duidends Pou Chow a fenametod epic thot sepreousts Hw potion o Company's tted diwidends paid to pee + each outstanding show df Common Shook - DM weaowes fu omount Crh Aishibulkd to shuuleldews on o es -shouw barie- DPS = Totes PIVIDEN DS Paid Tete Number of Outstanding. Showa Tt pr vices insights tuto tn Caah wtuns Avot showholdens eeeive pr veh Gown fp eum. TY reflects Ba araae divided poli ond ti Committ: Lo aaa permits to shar holdeus Dee & waniinly sel by dnvertas seoking, tk © olso wel th frnanciel analysis to Ousess a CO ‘6 diwiolewd ~p ing ddotl: omd timp, ddd Yields with sean tn the sam, tnduo tayPRICE To EARNINGS RATIO (P/E RATIO) Te Prive -to-Gouutugs Ratio is a valuedion webic woek to weoounres the relative Voure 04, 0 Commpeuuay's stock boy. comapamitag Gs Uwsewnt worket price peu shaue +o tt: cnuivge per show C EPs) MARKET PRICE PER SHARP P/E RATIO = EARNINGS PER SHARE CEPs) We PIE vate provides instants “unto how wich cnvestos our Wiig, to poy Lot qupee of cosninge Qonenectect by thr Compan « Tr safle morket eopectatione reg oucling que Co qute eouunings qth and propttebilite.: PJE vratio Commonly voed by dvutns aud _omolyts In finandal ounbyis, valuation Moolels , omol chveatmnt deefstons - malkéng Te helps urveotos Omus tur relodive Voluoton 4 oO cCompeuny's Stock Auol Compour i with ofey couapouica wn Ww Sour vaaluotny or mMonket.MARKET PRICE PER SHARE V/s EARNINGS PER SHARE + Mouker Price per shore due wut wmorket Vole of tb. Co Zc Stock while Eounings Rr shove cuts ifs Prog! faboili: on a Pou-shone bavte. + Mauket Price por Shoe clefeuutued ue Supply avd demand cuynnules ty Wu sfock mourket, whereas paeante Pr Shore is bavod on th Com s fi ‘chop pesformam ce. amd! reel Ui + Moker patce pe Share cam os uuideliy foctwesn Comnpouries _amol cnduastn’es , while Coat per _shaue provides a share anol'zedl mesure for Compo itedouli. Quass onan” ‘t Pet 7t Price -To- SCALE Rotfo (PJs votio) Tur Pefee - To- Scale Ratio (P/s wokto) & @ valuation mebfe useol to wemoures dre yuotive volue 4 a & ‘5 Sfouk Commponing, Us market Price peu share to Us Teenne pew shoue- : Moxiket Price Pa shaue $ 2 P| Eo Rerwue Pr Shure Tn Ps tatio provides fnsights cute how wach — fwweotors one willing to ‘for coe mee pn eneTe helps dnverters amen the Company's valuotion walotive -to ths sales pofermance- Pjs ratio is Commer used fuvestos and ounalysts mw finanetal , orpecioloy +" Compauita wif volatile cain Te halos Unvectrs aness We to Us revere amd Compuue with Oty Comrpanies Wy te Somme faduvatry. or worker. PRICE To BOOK Rotiv (P/B ratio) Th. Price - To- Book Ratio %& o valuotion mebfe used tp weosme fx velotrve. yolue + a comepouaigs etock bi Comparing, ifs monket price — pey shoue ae book value pu chore: Moyket Pace Pou Shaue P]& Ratio = | Book value peu shauene gation Cee woed by tuvertas ! ic oul fe, re, fo cn Co. (es Wihh Sfealole_ ob Prngible ese. Tk weljas vineatele anbees ee ol S valuation vuative -to tts book value ond co te with oer Ce ca aoe Galina bg or ararkof. PIPPERENTIAL VOTING RIGHTS CPVR) . af penne of Nein nee ous shows ‘ of a compaunay' fox tod give Shouloldens such ao foundeus oy ees qretey vo! Wee pu Shoue, Compurrect to de Chowrlra (ders . DVR allows Contain sharboldens to moluiatn coupol over te cownpany, while holding ao Smalley percentage Oh fold equity Tr dnabte qouncleus and momagement bb wYary ve Control even ao au or flute! Hew cconomic oul My He irae te Types: + Duof- loss Stouchwe » Mullple Voting ShanesPooteet, foundous Vision : DVR allows foundeus to mainfain Co ove Stontegle decisions ano! Co “bea atc fomo s DVR Cam _enco a tong tem Pouspective by veduuing tae Myplacnce Of Chaut -L0 onented furveoters - aaeayy Dua Gn provide sfobtlity and Conti nual eae ty Uradlauobiph , ustitl may VA it’ fue Co, pujormamel anol growth: 7 a eae 5 ar common among, Companies _fousilg onlay business , anol Sfertups seaking bh mike li eae eae Company's direction. a wn alto be found tn dncluohyes we fouurclexe’ Wiston ano! long tou $ ane Conrfoleutd wit iP, CT Me guceess-