My Fundamental Analysis

This posts summarizes some of the most important financial ratios I look at when evaluating a company. Note that these are just general, quantitative guidelines. Much more work needs to be done in investing than comparing numbers.

S/N	Metric	Description	What I Consider Good
	Valuation
1	PE Ratio	Price / Earnings	< 20
2	Dividend Yield	DPS / Price	Consistent (4~7%). Use in conjunction with payout ratio.
3	PB Ratio	Price / NAV	0.7 – 1.5, highly dependent
4	P/E * P/B		< 22.5
5	Free Cash Flow Yield	FCF / Market Cap	> 5%
	Effectiveness
6	Gross Profit Margin	Gross Profit / Revenue	>15%
7	Net Profit Margin	Net Profit / Revenue	>7%
8	ROE	Net Profit / Equity	> 15%
	Leverage
9	Current Ratio	Current Assets / Current Liabilities	> 1.5
10	Net Gearing Ratio	(Total Debt – Cash) / Equity	< 0.5. < 0.3 for REIT
11	Debt to Equity Ratio	Total Debt / Equity	< 0.5
12	Debt To Cash Flow Ratio	Total Debt / OCF	<= 3
13	Interest Coverage	EBIT / Cost of Interest	> 5 for REIT