Intrinsic Value Comparison

Return on equity = Net Income / Net Assets Determines how well a company produces revenue based on their current assets (excluding liabilities). Investors can use this to gauge how well their investments (shareholder equity) are generating income. When comparing companies, the one with a higher income and lower assets is the better performer. The higher the ROE the better.

Return on assets = Net Income / Total Assets = Net Income / (Net Assets + Net Liabilities) Determines how well a company produces revenue based on their assets and liabilities. Investors can use this to gauge how well a company's management uses their total assets or resources to generate income i.e. how profitable a company is relative to its total assets. The higher the ROA the better.

Earnings per share = (Net Income - preferred dividends) / Common Stock weighted avg. Determines how much a company's net income is allotted to each share of common stock. Weighted average of common stock outstanding is described as the average of all common shares outstanding each period of the year. Example: 1000 shares in Q1 & Q2, another 500 shares issued in Q3 and a total of 1500 shares in Q4 would equal a weighted average commonof (1000*0.25) + (1000*0.25) + (1500*0.25) + (1500*0.25) = 1250 common stock outstanding

Price to Earnings Ratio P/E = Share Price / Earnings Per Share A metric used to evaluate a company's current share price relative to its earnings. Also referred to as price multiple or earnings multiple. A high P/E ratio implies that the company is overvalued or that shareholders are expecting high future growth. In contrast a low P/E ratio implies that the company is undervalued.

Sales Per Share = Revenue / Average shares Determines the revenue generate per share, often described as measuring a company's "productivity" per share outstanding. Useful alternative to EPS when valuing a company that is not making money. When comparing to companies in the same sector, the higher the SPS the stronger the company's top line.

Price to Sales = Share Price / Sales per Share Indicates how much investors are willing to pay for a stock per dollar of sales. A low value could imply the stock is undervalued, and vice versa. Useful alternative to P/E when valuing a company that is not making money.

Debt to equity ratio = Total Liabilities / Net Income Used to evaluate a company's financial leverage. It can act as an indicator of: - How much debt is being used to generate shareholder's equity - How much debt Vs equity is being used to finance operations - The ability to pay off any outstanding debt using the company's net income