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Understanding financial papers

Sometimes reading the financial pages of your daily newspaper is like trying to understand a foreign language.

To help you make sense of it all, we’ve explained what each column heading means.

ASX Code

A code of at least three letters given by the Stock Exchange to each listed company. This code is expanded to identify securities other than ordinary shares.

Company Name and Par Value

The company name is the official stock exchange abbreviation, not the full legal company name. Par value is the nominal value given to the company’s shares, most commonly 50c or $1.

Last sale

This is the last sale price of the stock. It is worth noting that for smaller companies the sale might have been several days or more in the past.

+ or –

This shows if there has been any price variation on the day. It is quoted in cents per share and if there has been no change or no sale, it is left blank.

Vol 100’s

The turnover figure showing the number of shares sold in multiples of 100. From Tuesday to Friday the figure is for the previous day’s activity but on Monday it shows the total for the entire previous week.

Quote – Buy / Sell

The buy and sell are the closing buyer and seller quotes. The buy quote is the highest price that prospective buyers are bidding for a stock. The sell quote is the lowest price sellers are willing to accept in the market.

Dividend yield percent

This is the theoretical return on an investment if shares are purchased on the share market at the prevailing price. It is calculated by multiplying the dividend, in cents per share, by 100 and dividing this by the market price of the shares, in cents per share.

EPS – Earnings per share

This is the profit per share that the company has earned. This is shown in cents per share, and is based on the company’s last full year’s profit.

P/E ratio – Price/Earnings ratio

The price-earnings ratio shows the number of times the market price exceeds the earnings per share. It is calculated by taking the current share price and dividing it by the ‘per share’ earning rate.

The information in the last two columns gives an indication of the share-market assessment of a company’s performance.

Final word of warning

Try not to get into the habit of stock watching  such as checking your stocks every day. It can take all the fun out of investing for the long term. Timeframe is one factor which can constitute the difference between ‘speculation’ and ‘investment’.

If you must check your share-market values more frequently than quarterly, obtain a price chart, which provides a pictorial view of medium-to-long-term price trends. It will put things into better perspective.

• Robert Goudie is an authorised representative at Meritum Financial Group Pty Ltd AFSL 245569.



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Posted on Mar 25 2015

Posted by on Mar 25 2015. Filed under Finance advice. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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