BIZStrat Shareholder-Return Ratios

BIZStrat STRATEGIC MANAGEMENT
Financial analysis ratios, Shareholder-return ratios

Shareholder-return ratios

Includes:

Total shareholder returns
Price-earnings ratio
Market-to-book value
Dividend yield

Total shareholder returns

Earnings in dividends as well as in appreciation in stock value over time (t+1)

Total shareholder returns = Stock Price (t + 1) - Stock Price (t) + Sum of Annual Dividends Per Share/ Stock Price (t)

For instance, if a shareholder paid $10 at time t, and at time t+1 the share of stock is worth $12 (in appreciation), and the dividends over time t+1 is equal to $0.50, total shareholder returns equal ($12-$10+$0.50)/$10=0.25, or a 25% return on the initial investment of $10.