In theory this is a simple concept. If Company A has earnings of £1 million and has 5 million shares in issue then the earning per share is £0.20. However there are some complicating factors. The fact is that companies have great flexibility in how they choose to report earnings per share. There are numerous [...]
Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a given stock. Dividend yield is calculated by dividing the annual dividend paid per share by [...]
This is the price of a share in a company divided by the dividend paid on it. Unlike the P/E ratio this is a matter or fact and cannot be fudged by accounting sleight-of-hand which can massage the “earnings” quite substantially. So if a share is trading at £20 and last year the company paid £1 [...]
This is in fact a fairly simple one. P/E Ratio is a company’s share price divided by the earnings per share. So, if a company’s shares are currently trading at £10 a share and if the earnings for the previous 12 months are £0.85 the share has a P/E ratio of 11.76. The P/E ratio [...]
The Bank for International Settlements is an organisation that fosters co-operation between central banks and other agencies in pursuit of monetary and financial stability. It provides facilities for international financial operations and acts as agent or trustee in international financial settlements. Its banking services are available exclusively to central banks (such as the Bank of [...]
This is a spread which is rendered unprofitable because of unreasonably high agents’ commissions. See also: Spread Bid-Offer Spread
The “spread” is the difference between the purchase price and the share price of a security (stock, share etc). You will find it mentioned in many reports and quotes in the newspapers on on financial websites. See Bid-offer Spread
This is the difference between the higest buying price (offer price) that a buyer is prepared to offer and the lowest selling price (bid price) that the seller is prepared to accept.
If you can convert an asset to cash easily and quickly, with little or no loss of value, the asset is said to have liquidity. For example if you have shares or bonds in a well known company, such as Ford, GE or Microsoft, you could sell these easily within a few hours just by [...]
The generally accepted definition is that Cash Investments are short-term obligations, usually ninety days or less, that provide a return in the form of interest payments. Examples are money-market funds and short-term Certificate of Deposit. Putting your cash on deposit in a bank or similar institution is not considered a cash investment but a cash [...]
When a company or a government needs to raise cash, it may opt to borrow the money it needs from the public through the selling of bonds. The company or government department (the “issuer”) of the bond outlines how much money it would like to borrow and specifies a length of time it wants the [...]
In practical terms there is no difference as the words are used interchangeably to refer to the pieces of paper used to denote ownership of a particular company. Most commonly these are called Stock Certificates in the US and Share Certificates in the UK. In modern financial markets, the distinction between stocks and shares has [...]
This directive replaced the Investment Services Directive (ISD) in 2008. It is considered to be the most significal European Union legislation affecting investment intermediaries and financial markets since 1995. It extends the coverage of the ISD regime and introduces new and more extensive requirements for firms to ensure they give the best and most appropriate [...]
HMRC have published the long delayed survey which they commissioned on Save As You Earn (SAYE) and Share Incentive Plans (SIP), which considers whether the schemes have met their policy objectives. The survey on SIPs was due in 2005. While the report provides some useful statistics, it is disappointing that HMRC have failed to address [...]
New Powers Come Into Force Next April As part of a drive to track down tax evaders, up to one million landlords could be subject to investigation from HM Revenue & Customs (HMRC) who aim to identify those landlords who are not paying the correct amount of tax. HMRC say that in their experience many [...]
Internet fraudsters are exploiting the banking meltdown by attempting to trick users into handing over details of their bank accounts. These crooks – called Phishers – set up false websites which look like the websites of real banks and send out emails trying to get people to log on to these sites and by so [...]
Here’s a question received a few days ago from Ron: Hi, Last year I invested a large amount of money in a limited business. The business made some money but not enough to break even. I am thinking of winding the limited company up although we have been more successful this year/ So I can [...]
All four defendants in the marathon Guinness trial were facing jail after the jury returned “guilty” verdicts following five days of deliberations. On the 112th day of their trial, which was the most expensive court action ever brought at that time; Ernest Saunders, Gerald Ronson, Sir Jack Lyons and Anthony Parnes were convicted on all [...]
Investors have been warned to beware of fraudsters targeting former customers of rogue stockbroker Pacific Continental Securities. The UK Financial Services Authority closed down Pacific Continental Securities in June of 2007. The company had been authorised as a broker for several years but had a turbulent and contentious history. Having done little to police the [...]
Deciding on whether it would be beneficial for a property investor to use a Limited Company can be quite complicated. A lot will depend on your personal circumstances but also on what type of property business you are engaged in. For example if you buy property to renovate and then sell on at a profit [...]
