[Financial Statements] Four words to know about stock analysis: "EPS, PER, PBR, ROE"?
*ROE
Return on equity, self-financing
the ratio of a company's term profit to its equity capital
Return On Equity. It is an indicator of how much profit the invested equity capital has made, and in Korean, it is called the 'return on equity'.
*PER
Price learning ratio (PER) is an indicator of how many times the stock price is divided by the company's earnings per share and is divided by the net profit per share (EPS).
*PBR
Price Book Value Ratio Share Price Book Value Ratio Share Price divided by net asset value per share compared to net asset per share (PBR = stock price / net asset value per share)
*EPS
Earnings per share (EPS) is the value obtained by dividing the company's net profit (earnings per share) by the number of shares, and is an indicator of how much profit per share has been generated. In other words, it can be said to be an indicator of shareholders' share of the company's profits for one year.
Net income per share is also the basis for calculating the Price to Earnings Ratio (PER).
The higher the EPS, the higher the investment value of stocks, which means that the company's management performance is good. Therefore, there is also a lot of dividend capacity, which has a positive effect on stock prices.
EPS increases as net profit increases, and decreases when the number of shares increases due to stock conversion or capital increase of convertible bonds.
In particular, the size of EPS has become important as the pattern of the stock market has recently changed to emphasize corporate profitability.