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Question 1

Market capitalization,

Answer 1

Defined as the value of all outstanding shares of a corporation, has an inverse relationship to both risk and return.

Question 2

price to earnings ratio

Answer 2

Price of the stock / EPS :

$40 / EPS $2 = 20 Over the past 5 years Apples EPA: 20.97

Question 3

EPS

Answer 3

Earnings per share, is company’s profit - dividend / divided by the outstanding shares.
($1 billion - $200 million) / 400 million shares = $2 per share

Question 4

Understand the PE ratio well

Answer 4

A high P/E could mean that a stock’s price is high relative to earnings and possibly overvalued. Conversely, a low P/E might indicate that the current stock price is low relative to earnings.

Question 5

High P/E

Answer 5

The value of the stock is overpriced

Question 6

Low P/E

Answer 6

May indicate that the stock is undervalued

Question 7

Equity

Answer 7

Shareholder Equity = Total Assets − Total Liabilities

Question 8

Assets are are

Answer 8

Cash, accounts receivables , inventory and buildings

Question 9

Liabilities are

Answer 9

Your obligations to pay cash, transfer assets or provide services.

Question 10

Funding assets can be achieved

Answer 10

Owner investment or owner equity & increase liabilities.

Question 11

stock holding other companies

Answer 11

Short and long-term marketable securities are at its stock holding other companies

Question 12

Book to market ratio?

Answer 12

Equal & net asset / by market value 128 B / 628 B Apple 21% in 2016

Question 13

Accrual accounting ?

Answer 13

Accrual accounting revenue is noted when it is earned not received expenses are noted as they are incurred not paid

Question 14

Gross margin

Answer 14

Gross margin the difference between what a product cost us and what we sell it for

Question 15

Operating income

Answer 15

Gross margin less regular and recurring expenses

Question 16

Income

Answer 16

Income from continuing operations that operating income less net interest expense.

Question 17

Return on sales

Answer 17

Equal net income / by the sales

MSF = 20% 2016 APPL = 21 %

Question 18

Debt ratio

Answer 18

Equal = total liabilities / total assets

MSF = 63% 2016

Question 19

Return on equity ROE

Answer 19

Equal = net income / total Stockholders equity

Harley-Davidson 29% - 49%

Question 20

Asset turnover

Answer 20

Equal to sales / divided by assets

Question 21

Asset to equity ratio

Answer 21

Equity = assets divided by equity

Question 22

Discretionary trading

Answer 22

Trading started via human input rather than via a program.