Cost & Profit centres

Learning outcomes: Calculate shareholders´ratios.
Use the ratios to interpret and analyse financial statements
from the perspective of shareholders.

 The

stock market.

 Primaryoffering.
 Secondary market.

 Ways

to earn money in the stock market:

 Short term: Speculation / Technical analysis.
▪ Is necessary to know the market psychology
▪ Be informed: economycfigures, rumors and
expectations.
▪ Markets are irrational: Netherlands and tulips,
south seas, Tronics boom (1959 – 1962), Dot com
´s boom (1999 -2001)

 Long term / Fundamental analysis
▪ Think ofthe increased value of the shares.
▪ To buy shares as you´ll buy a business.



Other factors to evaluate shares.
 Warren Buffett:
▪ Buy bargains (below the book value).
▪ Simple andunderstandable businesses.
▪ Consistent operating history (unchanged in core
business).
▪ Favorable long-term prospects.
▪ Rational management.
▪ Management reporting with certainty.
▪ Focus on returnon equity and not in profit per share.
▪ Companies with high margins ("Monopoly" Branding).

 Financial advisors:
▪ Columbus.




The best analysts in Mexico, 2014.
Shareholdersgenerally buy shares in a company
for two main reasons:
 Capital gain.
 Dividends.

Potential shareholders are likely to use
shareholders ratios to assess the worth of a
company.
 This can helpthem to make more informed
choices before buying shares in certain
companies.




Mide que tanta utilidad por acción está generando una empresa.



No muestra cuantos dividendos se estánpagando a los
accionistas, sino que cantidad tiene la empresa disponible por
concepto de utilidades.



Esta cantidad no se entrega a los tenedores de acciones porque la
empresa puede decidirretener las utilidades para otros
propósitos.



La fórmula es la siguiente:
Profit after tax
___________________________
Number of ordinary shares



El resultado de esta fórmula...