Stock market for beginners: How to interpret a company’s key financial information

Julie Brownlee, Fsp Invest, 15 Apr. 2014

Tags: stock market, stocks, shares, company information, stock information, share information, online, newspaper, financial information, listed companies,

When you’re looking for shares to invest in or you own shares and want to keep an eye on what they’re doing, you can look at a company’s key financial information. You can either find this in the business pages of a newspaper or online on a variety of financial websites. Let’s take a closer look at what it means…

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You can find listed companies financial information in the newspaper or online

If you’re looking at a newspaper, you’ll find the shares you’re looking for under its relevant sector, Gareth Stokes in Fear, Greed and the Stock Market explains. If you’re looking online, it’s just a case of searching for the company’s financial information.

The information provided in a newspaper and online is quite similar.

Online information will be completely up-to-date and include the current share price. It will also include some other information such as earnings per share and the volume of shares traded.

Information in the newspaper will be for the last trading day before going to print.

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An explanation of the key financial information in the newspaper or online

Let’s take a look at the most common financial data you’ll come across and what it means…

This is the closing price of the share from the previous trading day.

High and low (H/L) or day’s range
This is the highest and the lowest level the share price traded at. If it’s in the paper, it will be for the previous trading day. If online, it will cover the current or most recent trading day.

Year’s movement (YM%)
If you use an online source, as well as the percentage movement over the past year, you’ll get the 52 week range. This shows you the highest and the lowest trading price over the past year.

PE ratio (PE)
You can use the price earnings (PE) ratio to gauge whether a share is over-or undervalued. A high PE indicates a share is overvalued. A low PE indicates a share is undervalued. You can read more about the PE ratio here. You can also get the forward PE online.

Dividend yield (DY)
This is the size of the company’s dividend compared to the current share price as a percentage. A larger dividend yield indicates a larger dividend.

Day’s volume (DV)
This is the volume of shares traded on a particular day. In the paper it will be for the previous trading day. Online it will be the current trading day. The higher the volume, the more shares traded.

So there you have it, how to interpret a company’s key financial information.

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