Accounting paper Essay Example | Topics and Well Written Essays - 750 words

Accounting paper - Essay ExampleReturn on legality (ROE), according to the analyst, is considered to be the most signifi female genitaliat ratio in order to evaluate a smart sets performance from an investors point of view. ROE measures a confederacys ability to brighten a collapse on all of the capital that is being employed by the company. The ratio is cypher as net income upon total shareholders equity. The Stephens company ROE amount to 25.45% which can be comprehended as for every $100 invested in the equity of the company, the company generates a return of $25. Any company has a negative financial leverage when the return on common carnation holders equity is less than the return on assets. In the discussed case, Stephens company has a positive financial leverage and thus portrays a function financial outlook.Earnings per share calculates the $ which is acquire by the shareholder per share which is held by him. Stephens Company EPS is 7.90 which appears to be quite sui table and portrays sound and strengthened financial outlook. The ratio is calculated by dividing net income minus the dividend paid on like stock per the common stocks outstanding throughout the year. Dividend payout ratio on the other hand is calculated by dividing the total dividend paid during the year with the net income. It is basically the percentage of the total net income during the year the directors of the company decide to give out as divided. From an investors point of view, the companies with higher dividend payout ratio are the outmatch ventures to invest in.Price per Earning or P/E ratio is calculated by comparing the grocery price per share with the EPS. Stephens companys P/E ratio is 7.59 which is lower than the perseverance average of 10. This could be due to the lower share price of Stephens company as compared to alike companies in the industry. Lower P/E ratio can