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What are the key share ratios?

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The earnings per share (EPS) is net income for the year attributable to common shareholders of the company divided by the weighted average number of issue-adjusted common shares during the period, adjusted for dilutive shares:

EPS = (Net Income – Preferred Dividends)/Weighted Average Common Shares).

The price-to-earnings ratio (PER) is one of the most popular equity multiples used by financial analysis showing the market’s valuation of a company for a period relative to its earnings per share for the period.  The formula is the market price per share divided by earnings per share:

PER = Price per Share/Earnings per Share

Like the P/E, price-to-sales and the price-to-cash flow ratios relate some measure of the operating performance of a company to the market price per share of its stock.  Whereas price-to-sales ratio (PSR) is the company’s market capitalization divide by its total sales over the past 12 months, the price-to-cash flow ratio (PCF) is a multiple of the company’s market cap relative to its operating cash flow in the most recent 12 months:

PSR = (Current Price per Share x Shares Outstanding)/Sales Revenue
PCF = Price per Share/Cash Flow from Operations per Share
PCF = Market Cap/Cash Flow from Operations

The book value (BV) of a company, which is its assets less its liabilities, equals its owner's equity and is affected by many factors, such as paying dividends, stock repurchases and issuing new stock.  The book value per share (BPS) is the value of a company’s equity available to common stockholders (assets – liabilities – preferred stock) per share of outstanding common stock:

BPS = Book Value/Shares Outstanding

Price-to-book value ratio (PBR) is the equity ratio used to compare the net assets available to a company’s common shareholders relative to the per share market price of its stock, where the formula is the stock price per share divided by the book value per share:

PBR = Market Price per Share/Book Value per Share

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