INVESTING WITH DATES AND NUMBERS1

In this edition , I will be treating two crucial ways of getting the best from your investment decisions.
Investing with numbers has to do with making your investment decision based on the values of some numeric fundamentals.The popular among them are the turnover,Earnings per share(EPS),the price per earnings ratio(P\E),the profit after tax(PAT),no of outstanding shares,etc.I will discuss this numeric fundamentals one after the other.

Turnover:The turnover of a company represents the amount of goods and services sold by a company in a particular year.An increase in the turnover of a company means that the company was able to generate more business in the period under review.A reduction in the turnover of a company means that the company lost some business in the period under review.A reduction in turnover could also be caused by disturbances in the economy such as strikes,political upheavals,etc.An increase in turnover may not translate into an increase in profits of the company if cost of production increased in the year.

Earnings per share;EPS is the ratio of profit after tax of the company and the number of shares in issue.It tells us how much dividend the company is able to pay based on its earnings.An increase in EPS is usually a reflection of increase in profit after tax of the company and it can also occur when shares of a company are reconstructed.A reduction in EPS could result from either a reduction in the PAT or procreation of shares through bonus issues.

Price per earnings ratio:It is the ratio of price to EPS. It tells us how long it will take for an investor to recoup his initial investment.

Profit after tax(PAT):An increase in profit after tax could result from an increase in turnover or a reduction in cost.

Number of outstanding shares in issue: This is the number of shares in issue .The larger the number of shares in issue the lower the EPS and the higher the P|E ratio.Therefore, if two companies with the same profit level but different no of outstanding shares in issue.The company with a lower no of shares will have a lower EPS.

Investing with dates involves making decisions based on dates.The important dates are the 1st ,2nd 3rd ,4th quarter and the date of closure of register of members.One unique attribute of these dates is that they differ across companies .The end of year of AP is December while the end of year of First Bank is March.
This information is readily available on the pages of newspapers and in Annual reports of companies.I will discuss how to profit from these dates and numbers in the next edition.