How to understand the financial papers

All / 15.03.2018

Sometimes reading the financial pages of your daily newspaper or news website is like trying to understand a foreign language! To help you make sense of it all, we’ve explained what each column heading means.

Company Name:

This company name is the official stock exchange abbreviation, not the full legal company name.

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.

Last sale:

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

Move +/-:

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.

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.

Vol 100s:

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.

Day’s High / Low:

The price this share has traded at today at its highest and lowest point.

52-week High / Low:

The price this share has traded at for the past year at its highest and lowest point.

Dividend c per share:

The amount of the dividend paid in cents per share. ‘f’ means fully franked. ‘p’ means partly franked.

Dividend times covered:

This figure is a ratio representing the number of times a company’s dividend is covered by its net profit. It is calculated by dividing dividend paid into the net profit.

Net tangible assets:

This figure is calculated by deducting the intangible assets such as goodwill and the company’s liabilities from the total assets.

Dividend yield %:

This is the theoretical return on an investment if shares are purchased on the sharemarket 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).

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.

 

A final word of warning

Try not to get into the habit of stock watching (checking your share prices 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, use a price chart which provides a pictorial view of medium-to-long-term price trends. It will put things into better perspective.

 

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.