Ratio Formula –stock is overvalued or undervalued
Question: Ratio Formula –stock is overvalued or undervalued…
| Ratio | Formula | 2012 | 2013 | 2014 | 2015 |
| Net profit margin | (Net income ÷ Revenue) | 18.8% | 18.3% | 15.4% | 16.6% |
| Net Income | 9,019 | 8,584 | 7,098 | 7,351 | |
| Revenue | 48,017 | 46,854 | 45,998 | 44,294 | |
| Return on equity | (Net income / shareholders’ equity) | 27.2% | 25.7% | 23.2% | 28.5% |
| Shareholders’ Equity | 33,168 | 33,440 | 30,561 | 25,764 | |
| Price/Earnings Ratio | (Market Value per Share / EPS) | 58.5 | 70.6 | 88.9 | 89.3 |
| Market Value per Share | 117 | 137 | 144 | 151 | |
| EPS | 2.00 | 1.94 | 1.62 | 1.69 | |
| Dividend payout ratio | (Dividend per share / EPS) | 51.0% | 57.7% | 75.3% | 78.1% |
| DPS | 1.02 | 1.12 | 1.22 | 1.32 |
Question 1:
Based on the above-given ratio, can you tell whether the stock is overvalued or undervalued?
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| Ratio | Formula | 2012 | 2013 | 2014 | 2015 |
| Net profit margin | (Net income ÷ Revenue) | 9.4% | 10.1% | 9.8% | 8.6% |
| Net Income | 6,178 | 6,740 | 6,513 | 5,452 | |
| Revenue | 65,492 | 66,415 | 66,683 | 63,056 | |
| Return on equity | (Net income / shareholders’ equity) | 27.6% | 27.6% | 37.1% | 45.3% |
| Shareholders’ Equity | 22,399 | 24,389 | 17,548 | 12,030 | |
| Price/Earnings Ratio | (Market Value per Share / EPS) | 17.2 | 18.9 | 22.1 | 26.1 |
| Market Value per Share | 68.02 | 82.71 | 95.26 | 96.94 | |
| EPS | 3.96 | 4.37 | 4.31 | 3.71 | |
| Dividend payout ratio | (Dividend per share / EPS) | 53.8% | 51.3% | 58.7% | 74.4% |
| DPS | 2.13 | 2.24 | 2.53 | 2.76 |
Question 2:
Based on the above-given ratio, can you tell whether the stock is overvalued or undervalued?
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| Ratio | Formula | 2012 | 2013 | 2014 | 2015 |
| Net profit margin | (Net income ÷ Revenue) | 10.5% | 10.4% | 11.5% | 12.2% |
| Net Income | 629 | 624 | 703 | 764 | |
| Revenue | 5,995 | 5,997 | 6,121 | 6,282 | |
| Return on equity | (Net income / shareholders’ equity) | 27.6% | 27.4% | 30.6% | 35.0% |
| Shareholders’ Equity | 2,280 | 2,277 | 2,294 | 2,183 | |
| Price/Earnings Ratio | (Market Value per Share / EPS) | 14.8 | 15.0 | 18.9 | 21.7 |
| Market Value per Share | 44.26 | 46.28 | 67.93 | 86.64 | |
| EPS | 2.99 | 3.08 | 3.59 | 4.00 | |
| Dividend payout ratio | (Dividend per share / EPS) | 45.5% | 49.4% | 45.7% | 48.0% |
| DPS | 1.36 | 1.52 | 1.64 | 1.92 |
Question 3:
Based on the above-given ratio, can you tell whether the stock is overvalued or undervalued?