Investor Ratios

Question 1

Dividend based:

DPS
Dividend Cover
Dividend Yield

Answer 1

Annual Dividend per share = dividend p&l/no. Of shares in issue (share capital/nominal value)
How much dividend they get per share

Dividend yield = Annual DPS/Market price per share (given in q)
How much dividend a company pays out relative to share price

Dividend Cover = PAT/Ordinary dividends (interim + final)
How many times a company’s earnings could pay the dividend

Question 2

Earnings based:

EPS
PE Ratio

Answer 2

EPS = PAT and preference shares/number of ordinary shares in issue (share capital/nominal c)
Profit to each share

P/E Ratio = Share price/EPS
e.g. P/E of 5 = shares are trading 5 times over their value
How much an investor is willing to pay to invest e.g. 5 times current earnings

Question 3

TSR

Answer 3

(DPS + Change in share price)/share price at start of the period