Understanding company figures with shares and ratios

Understanding key figures is an important part of analyze shares. Ratios show how a company is performing financially and can help you assess whether a stock is worth buying or selling. By learning the basic ratios, you can better inform your investment decisions.

The most important key figures

Among the most used key figures are profit, turnover, debt/equity ratio and dividend yield. Profit shows how profitable the company is, while turnover tells you how much money is coming in from sales. The debt/equity ratio shows how much the company has borrowed in relation to its equity and the dividend yield shows how much of the profit is paid out as dividends to shareholders. Looking at these figures gives you a picture of the company's strength and stability.

Learn to compare 

Key figures become even more useful when you compare several companies in the same industry. A company with high profit growth and low debt may be more attractive than a company with weaker figures. At the same time, it is important to understand why the numbers look the way they do, for example, a high level of debt may be acceptable if the company has stable revenues.

Smart tips for beginners

Start by documenting the key figures you look at and note why you find a company interesting. This makes it easier to follow developments over time and see if your decisions were sound. Focus on the basic KPIs first before moving on to metrics that are considered more advanced.

Take help from us at Monitor Capital Markets

We at Monitor Capital Markets can help you understand key performance indicators and how they reflect a company's financial strength. Our services can help you analyze companies, compare figures and see which investments fit your strategy, for both listed and unlisted shares.