Talk:Financial ratio/Archives/2012

Indexes?

I have been searching high & low for the Indexes of industry ratio norms, such as S&P or Dunn and Bradstreet. It's often necessary to compair... Need to know what the typical ROI, Liquidity, etc levels for your class/segment. Otherwise how do you contextualise the ratios you derive? This should be explained and linked to germane pages. Very nice if there are links to good data sets or actual enhanced sofisticated tables/indexes organicly within the walls of wikidom. Pretty please? They will need to have link roots in the reference, index, and tables sections. hopefully point to directions & topics pages and extend to the actual tables themselves, or alternatly have a prominent directions "help" link at the top of the structure of the data array. I appologize for the afterthought here; but I finally found an example of what I mean: http://www.amazon.com/Bradstreet-Industry-Norms-Business-Ratios/dp/1592740715/sr=1-7/qid=1163393039/ref=sr_1_7/104-2644820-4249568?ie=UTF8&s=books

Here is a personal experience with D&B ratios. I worked for a private company who was repeated asked to submit its financial information. Finally, my boss gave them the numbers because they would give us the industry stats in exchange. When we got them, they were completely bogus. Obviously all the other people had fudged their numbers (may be my boss did as well). I would not rely on their ratios.Retail Investor 00:45, 14 November 2006 (UTC)

Merge from Financial measures

• Merge - both articles are the same subject. Financial ratio is the better term and goes with the category Category:Financial ratios Octopus-Hands 01:06, 17 December 2006 (UTC)
• Merge - I vote yes to such a merger. --Pgreenfinch 17:15, 17 December 2006 (UTC)

grotesquepelli avalanche, do we need that?

And why have some useful ratios disappeared to make place to this grotesque reference avalanche?

Also I hope that those who try to sate us with those refs checked their beloved book, as one definition is blatlantly an error, nobody defines P/E as they mentioned. See [1]. Payout ratio in particular has nothing to do with it. --Pgreenfinch 09:38, 11 July 2007 (UTC)

Please do not delete a cited reference and its definition from this article without establishing that the reference used in the citation is unnaceptable to Wikipedia. To the best of my knowledge, Barron's Educational Series is a reputable reference for financial ratio definitions. If this is not an acceptable reference for Wikipedia articles, please explain. Thank you. --Foggy Morning 01:54, 26 July 2007 (UTC)

Ridiculous oversourcing, and also coyright violation. Also, about the nonsense in the quoted definition, whether a misquote or an error in the series, it is nonsense, it has nothing to do with what is the P/E, you can check everywhere, that's all. --Pgreenfinch 07:26, 26 July 2007 (UTC)

This is an honest error (IMHO) from the source. I don't know if this will paste well, but you can find the 'definition' of P/E on page 423 of the Grapelli source in Amazon: [2]: "Price/earnings ratio: the price of a stock divided by the earnings per share, or the price multiple investors are willing to pay for a dollar of earnings." The other definition that was used here is not a definition, but a decomposition used in analysis (i.e. why is the P/E for one company higher than another) of, among other things, dividend policy. The problem is that P/E is not defined this way, as the other two terms (cost of capital and expected growth in earnings) in the decomposition cannot be directly observed - they have to be derived/estimated (guessed at would be another way of putting it).

In other words, P/E is not (except in textbook problems) defined by the more complicated version - implied cost of capital and/or implied growth rates are derived from the P/E (or sometimes, estimated growth rates / cost of capital used to find market pricing discrepancies). Or potential pricing benchmarks/estimates derived for non-traded companies/units. But this is a different problem: the short form is that P/E is defined as price/earnings and must be directly observed (there must be a market price). One can estimate a price or try to explain pricing differentials using the payout ratio/earnings growth version.

So, my view is that the other version is not a definition, but one decomposition that attempts to explain (some would call it a reformulation). Not every analyst/economist would agree with that formulation (although most would), or if they did, they would certainly all agree that the inputs are subjective and don't constitute the definition. It should probably not be in this page but would fit well in the p/e article.--Gregalton 09:25, 26 July 2007 (UTC)

Thanks, exactly the definition, that is widely used and that I gave myself by replacing the "decomposition" which was entered. Still, I consider that all those references to that book are making that article clumsy. --Pgreenfinch 12:52, 26 July 2007 (UTC)

references cleanup

Anybody wants to do that task? Springbreak04 13:39, 24 July 2007 (UTC)

I've abbreviated the sources in the Notes and references section. It would be helpful to have additional alternative sources for verification. I'm not sure everyone would have access to the books referenced, so alternate confirming or dissenting references are helpful. --Foggy Morning 02:39, 15 October 2007 (UTC)

External links to U of Vaasa

These external links were added about 18 months ago by someone at the University of Vaasa in Finland.[3] [4] The content of the papers seems very relevant to this article, but the publication history isn't clear. The journals don't seem to be published in English. I'm moving these links here for discussion. Can we use these papers as references rather than external links? Can someone confirm that these articles were peer-reviewed and published in reputable journals? --Foggy Morning (talk) 02:04, 30 December 2007 (UTC)

• On the Classification on Financial Ratios., (1990)
• A Review of the Theoretical and Empirical Basis of Financial Ratio Analysis, (1994)
• The Review of the Theoretical and Empirical Basis of Financial Ratio Analysis Revisited, (2005)

Hi,

Still this page needs clean ups. Remove the formulas in this page and give only links. It will give nice look. Please put reference and formulas in the bookmark page.

-sivikoo- —Preceding unsigned comment added by Sivikoo (talk • contribs) 16:16, 25 April 2008 (UTC)

IRR?

I think a link to the Internal Rate of Return should be inserted. —Preceding unsigned comment added by 83.217.156.234 (talk) 15:09, 31 March 2008 (UTC)

IRR is too much to explain concisely in one section, I've added a link to the capital budgeting section instead, and includes all those other wonderful ratios as well. — Kortaggio ^{Proclamations} _Declarations 00:58, 30 January 2009 (UTC)

EPS not a ratio?

The article currently states that EPS (Earnings per Share) is not a ratio, when it very clearly is. Not sure the best way to clean that up but I thought I'd bring it up. https://secure.wikimedia.org/wikipedia/en/wiki/Financial_ratio#Other_abbreviations — Preceding unsigned comment added by 167.219.88.140 (talk) 14:50, 27 October 2011 (UTC)