Price and return: verify date and adjustments
Adjusted prices can differ from actual closes after dividends and splits. Use the same adjustment and currency basis for period returns.
INDICATOR GUIDE
Check the formula and comparison group before relying on one ratio
P/E, P/B and ROE compress one aspect of a company. Meaning depends on numerator, denominator, period, one-offs and industry differences.
SIX METRICS
The question and limit behind each indicator
A high or low number does not by itself mean expensive or cheap.
Volume: observe participation behind a price move
Compare volume and turnover with averages. Check whether block trades, index rebalancing or expiration created a temporary spike.
Market cap is the market's equity valuation
Price multiplied by shares outstanding does not directly subtract cash or debt. Enterprise-value comparisons can require another basis.
P/E and P/B compare price with earnings and equity
P/E is not meaningful for losses, and suitable ranges differ across banks, platforms and manufacturers. Review normalized earnings, asset quality and expected growth.
ROE and margins test the persistence of returns
High ROE can result from debt or a small equity base. Compare operating margin, asset turnover and multi-year change.
Debt and cash flow test resilience
A debt ratio does not reveal maturity or interest rates. Review interest coverage, cash, operating cash flow and future investment and repayment needs.