Analysis Beginner: Tools and Tips to Evaluate Investments

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1.
A company's book value is _______.
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The value of its assets minus liabilites. Book value is the value of a company's assets.
2.
Investors who want high returns on investment may want stocks with _______ betas.
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High. The higher the beta, the higher the possible returns.
3.
You will find a company's audited financial statements in its ________.
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Annual report. The annual report contains audited confirmations of its financial statements.
4.
Asset utilization ratios are used to _______.
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Determine how a company manages its assets. Ultimately, asset utilization ratios help to measure a company's efficiency.
5.
Return on equity is a measurement that stock investors watch closely. It measures ________ compared to equity.
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Earnings after taxes. In other words, return on equity measures what a company is earning for stockholders.
6.
Balance sheets balance _______.
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Assets with liabilities. Equity, debt, taxes, and income are all included in assets and liabilities.
7.
To calculate a stock's price/earnings ratio, divide the present market price of a share by its earnings per share for the last 12 months.
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True. This is the correct way to figure price/earnings ratio.