More and more Australians are looking towards the share market for wealth creation and financial security, understanding how to read financial reports is an important strategy to learn. Most newspapers and now also on the internet you will see information relating to the share market set out in a table of columns, understanding what you see will help you with your company research and put you on the way to making sound financial decisions..
Following are some typical headings and what they represent.
52 Week High and Low
This is the indicator of the highest and lowest a share has reached in the past 52 weeks. When you are told that the share is at it’s high or low for the year, you need to make sure that it is for the 52 weeks or if the year has just started and you are only getting an indication of a few months.
As most newspapers do not allow for any bonus share or additional share issues the prices may not be a true high or low.
Company Name
The name of the company is given without saying what the company is involved in, some magazines such as Shares Magazine will sometimes provide descriptions, but in order to understand the companies better, information can be obtained through www.asx.com.au.
ASX code
This column is the abbreviation used by ASX for each company listed in the market eg. Westpac Bank is identified by WBC.
Last Sale
This column is the last price that the share was bought or sold for on a particular date.
+ or -
This column shows the movement of a share, if it has gone up or down compared with the previous trading day.
Buy
The buy quote or column is the indication of how much a buyer is willing to pay for a certain stock, but is not an indication of how many stocks they want to buy. This is the price at the end of the previous trading day.
Sell
The sell quote or column is an indication of what the sellers are willing to sell the shares for but is not an indication of how many stocks they want to sell. This is the price at the end of the previous day.
Dividend Cover
This is a measure of how many time’s a company’s dividends are covered by the profit’s of the company per share. This is abbreviated by ‘turns cov’.If this ‘turn’s cov’, is less than 1 the company is paying more in dividends than profits. In this case the company is using it’s profits from previous years to pay a dividend and may not be able to sustain this.
If the figure is 2.5 it has the power to increase its dividend payouts. When looking at a company you should look at a cover of 2 or above for dividend earnings.
Note Most growing companies pay low dividends to grow their companies faster. There is a direct relation between dividends and the day to day runnings and goals of a company.
Have an exceptional day
Teresa and the Team at
