Price of the Company's shares is determined by the traders in the market. This price is the perceived value retailers, which is influenced by many things, including how well the social and economic work. This is one reason why prices vary so much. Another major factor is the demand to buy or sell. If a company becomes a hot trade then a flock of customers could win offering for sale, why is the price temporarily to go higher.
Formula
Since stock prices are all over the place sometimes, it may be useful for calculating the estimated ideal price. There are many ways to do this, but the method takes the approach that the entire company is worth if sold today. Here is the basic formula:
= Price per share (future income + assets - liabilities) / number of shares
if you were to buy a company you would like to know how much money, property and debt, along with how to get the decision. You should also be concerned with how to get to making a few years down the road. This is the hardest part of the calculation, because it requires an estimated guess.
To find the number of
Publicly traded companies need to set your financial numbers every quarter, so that this information is available at most major financial websites, including Yahoo! Finance.
Example - XYZ Company for the quarter 1:
Assets: $ 33.5 billion (in the balance of total assets)
Liabilities: $ 3.7 billion (located in the part of the balance sheet total liabilities)
Number of shares: 315.9 million kuna (market cap divided by current price)
Earnings for 2006: $ 3.1 billion (included in the income statement net profit)
Earnings for 2007: $ 4.2 billion
Earnings for 2008: $ 4.2 billion
Earnings for 2009 +: $ 4.0 to 5.0 billion (this is where you have to guess)
Future earnings: $ 90.0 billion (assuming 20 years to 4.5 billion dollars per year)
Price per share = $ 379.23 = ($ 90.0 billion + $ 33.5 billion - $ 3.7 billion) / 315 900 000 kuna
future earnings is definitely the most difficult number to come up with. With a large, solid companies can use 15-25 years in the calculation, because the P / E ratio (Price to Earnings) 15-25 is pretty common. If you are unsure about the company, you may use 50-10 godina.Broj to use here is based on how long you think the company can maintain production and profit. And of course, you have to guess what will be done in each of those years.
If you factor in the P / E of 30, instead of 20, which will give us a price of $ 521.68. This shows how important a few years. Keep in mind that not only is the number of years is important, but so is the profit per year. With the United States is currently in a recession, companies can not be expected to grow much in the next two years, so it should be factored in.
Sometimes this method is very accurate (close to real world prices), and sometimes it is way off, so do not count on it as an absolute number. This is just another tool to use when analyzing companies. You can also look at the company's P / E ratio to see if the "normal" range.
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