The profile of a company’s financials provides a pulse as to the merit of whether to invest. Absolute numbers give a sense of scale. However, positions and results that have a common denominator of 'shares on issue' and 'ratios' help you to understand proportion.

Financials enable:

• comparisons to be made between companies;
• an analysis of financial condition to be performed;
• an assessment to be made of a company’s fundamental value; and
• a company to be benchmarked against other companies, the market and indices.

Shares Issued (m)

• The number of ordinary shares issued in the market as at the year end balance date. It is adjusted in the prior years account for dilutions from relevant capital changes, such as bonus issues, share splits, and rights issues.

Book Value ($ps)

• Represents what the shareholder owns of the company, after netting total liabilities from total assets. It includes both tangible and intangible assets. It is measured by dividing shareholders equity by the number of shares issued, as of the year end balance date.

Net Tangible Assets (cps)

• Represents shareholders equity net of intangible assets, converting preference share capital and minority interest, divided by the number of ordinary shares as at the year end balance date.

Sales ($ps)

• Calculated by dividing the company’s operating revenue by the diluted weighted average number of ordinary shares on issue. Non-operating revenue, such as interest, is not included.

Earnings (cps)

• Earnings attributable to each ordinary share on issue, adjusted for capital reconstructions (such as stock splits) and dividends. It is measured by net income after preference dividends, divided by the diluted weighted number of ordinary shares on issue during the year. The earnings exclude non-recurring items such as abnormal and extraordinary items. For equity investment companies, the earnings per share calculation include the net gain/loss on the sale of long-term investments.

Cash Assets (cps)

• Represents cash on hand, plus short-term deposits, that can be readily converted into cash.

Dividend Franking (%)

• This figure shows the percentage of the dividend which contains a dividend franking credit. This is also referred to as an imputation credit. It represents the proportion of the dividend on which the company has paid tax in Australia. If a company pays the full company tax rate, the dividends are fully (100%) franked. The credit may be claimed by you as a tax refund.

Payout Ratio (%)

• The percentage of net profit paid out as dividends. It is calculated by dividing the total dividend payout during the year by net profit before abnormal items. The payout ratio is important for several reasons:
  • It provides an indication of the sustainability of a company’s dividend. A very high payout ratio means the company does not have a large buffer in annual earnings and may need to cut dividends if earnings fall over time.
  • It can provide an insight to the growth orientation of the company. A low payout ratio is an indicator that the company is reinvesting a larger proportion of earnings in future growth. If the investments are successful it should lead to higher future earnings. If it does not, then the company will be eroding future shareholder wealth.

Price/Earnings (PE) Average

• Calculated on the basis of monthly closing prices and gives an indication of the company's P/E over time. It is measured by dividing the monthly closing share price for that year by earnings per share. Average annual P/E ratios can provide a useful benchmark for comparing the company’s current P/E ratio. Companies which are selling for much more than their historical P/E could be overvalued. It is important to bear in mind, however, that other factors can influence the level of P/E ratios. For example in a low interest rate environment higher P/E ratios may be sustained.

Return on Equity (%)

• An evaluation of profit earned in relation to equity resources invested (the viewpoint of equity holders). It is calculated by dividing net profit before abnormal items by shareholders equity.

Net Tangible Assets (YE%pscp)

• Represents shareholders equity net of intangible assets, converting preference share capital and minority interest, divided by the number of ordinary shares as at the year end balance date.

Book Value (YE%pscp)

• Represents what the shareholder owns of the company, after netting total liabilities from total assets. It includes both tangible and intangible assets. It is measured by dividing shareholders equity by the number of shares issued, as of the year end balance date.

Sales (YE%pscp)

• Sales are calculated by dividing operating revenue by the diluted weighted average number of ordinary shares on issue. Non-operating revenue, such as interest, is not included.

Company (%)

• Company return represents the annualised return to shareholders and includes all price changes and reinvestment of dividends adjusted for the effect of bonus issues and splits. This figure is calculated pre-tax.

Market (%) Benchmark

• Market benchmark represents the difference in percentage performance between the stock and the overall market. For example, if the stock return is 15 percent and the market return is 10 percent for a given period, then the +/- figure will be 15 percent -10 percent = +5 percent.

Index (%) Benchmark

• Index benchmark represents the difference in percentage performance between the company's stock and the Sector Index. For example, if the stock return is 15 percent and the sector return is 10 percent for a given period, then the +/- figure will be 15 percent -10 percent = +5 percent.