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The Financial Times Guide to Investing, 3rd Edition by Glen Arnold

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12

Key investment ratios and measures

This chapter explains the jargon used by the financial press when it reports on the performance or the financial health of a company. The investor is bombarded with a bewildering variety of summary statistics about companies. Here we describe the most commonly used and important. So if you don’t know your acid test from your NAV, or your PER from your ROCE, then this is the chapter for you.

At the end of it you will not only be able to understand company data in the Financial Times but will also be capable of calculating for yourself ratios and other measures from the base data – usually the annual report and accounts. You will then be in a position to analyse a company by focusing on those elements ...

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