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The article entitled: What are shares? posted on the website: http://www.howtobooks.co.uk/family/stock-shares summarize some measures of a company’s performance. Some of the measures that study the success of the company are:

First of all shares, because a share gives the shareholder the right to participate in the profits of the company. Usually the company will pay just a part of its earnings as dividends. Shares have a nominal value (it indicates the asset value of the company) and a market value (it corresponds to the value of the company’s assets and their quality of being able to make a profit). All the issued shares formed the issue share capital of the company.

The dividend also represented the company’s earnings because it is the proportion of the company’s profit paid to the shareholders. Usually it increases each year.

Also, it mentions the P/E (price to earnings) ratio which is a measure of the price paid for a share relative to the annual profit earned by the firm. The price to earnings shows the demand for a company share. A higher P/E ratio means that investors are paying more for each unit of net income. The reciprocal is the yield, which is an estimate of expected return to be earned from holding the stock.

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