Articles

Receivables collection period / Average collection period

Receivables collection period (Average collection period) is one of the indicators of activity,  which indicates how many days it takes our customers to pay our receivables. If we divide the number of days in the year (365) by the Receivables collection period indicator, we get Receivables tur

Inventory turnover ratio / Stock turnover ratio

Inventory turnover ratio (Stock turnover ratio) is one of the indicators of activity,  which shows how many times during the period (year) is a unit of inventories converted into revenues (i.e. is sold).   Calculation formula   Inventories are often the average from the beg

Payables turnover ratio

Payables turnover ratio is one of the indicators of activity,  which shows how many times during the period (year) is a unit of payables purchased.   Calculation formula   Trade payables are often the average from the beginning and final balance.   Interpretation and

Earnings per share (EPS)

Earnings per share (EPS) shows the amount of annual profit per a single share. It is important indicator used during investment decision-making.   Calculation formula   * Number of share is mostly the average for the period weighted by the number of days. EAT (PAT) is often reduced

Price to earnings ratio (P/E)

Price to earnings ratio (P/E) is one of the indicators of market value and capital market. It indicates how much are the investors willing to pay per unit of profit.       The indicator is primary but not the only indicator used when making investment decisions.   C

Price to book ratio (P/B) / Market value to book ratio (M/B)

Price to book ratio (P/B) or Market value to book ratio (M/B) is one of the indicators of market value and capital market. It is the ratio of the market value of shares with its carrying value. The carrying value may be measured in various ways, one of which may be shareholders' equity. &n

Days payable outstanding

Days payable outstanding is one of the indicators of activity,  which reflects how many days it takes us on average to settle our payables. The indicator is well applicable during negotiating delivery terms with suppliers.   Calculation formula    Trade payables are o

Receivables turnover ratio

Receivables turnover ratio is one of the indicators of activity,  which shows how many times during the period (year) is a unit of receivable converted into sales.   Calculation formula       Trade receivables are often the average from the beginning and final bal

Indicators of market value or capital market

Investors give their money into undertakings mainly for the purpose of obtaining: dividends capital gains from sale of business or its shares - if the market value of shares grows, the potential proceeds from their sale increase as well   Market value indicators often use data about mark

Cash-flow per share

The indicator Cash-flow per share shows the amount of operating cash-flow per a single share. It is therefore similar to Earnings per share (EPS), but because it does not have profit, but cash-flow in the nominator, it general disadvantages of EPS resulting from the use of profit (especially ea

Dividend yield

Dividend yield is one of the indicators of market value and capital market. It is an important indicator used when making investment decisions. It helps assess what annual yield (dividend) is obtained by shareholders for each unit of share value held.   Calculation formula    

Du Pont analysis

Du Pont analysis is used to decompose the indicator of ROE and subsequently also ROA to other indicators.  Therefore, it shows the components of ROE (ROA), which can then be analyzed in greater detail.   Scheme  

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